Nifty: Profit booking or Breakout above 10500?

This is the excerpts from my morning market view that is posted early in the morning in my blog. This is not a prediction or trading tip. This is an analysis of premarket macro narrative.

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Pre market analysis: 23 June 2020

Positives:

  • Flash Purchasing Manager’s Index for both Japan & Australia rebounded strongly for July

  • Global markets continue to consolidate

  • FIIs bought in the cash market yesterday

Negatives:

  • US Trade official comment caused volatility in Asian markets / EU-US futures this morning

  • Global market discussions are turning towards caution and second wave of virus

  • India-China border stand off is still dragging on.

Global Markets: -Consolidation

Both European and US markets continued to consolidate. Europe ended with small drop while US markets ended with small gain. Safe haven assets USD and Japanese yen are holding their gains. Gold gained and is trying to break out of the range. There were reports that the large funds are piling into gold to avoid getting caught in coming drop in equities. emerging market currencies were in sideways consolidation phase while emerging market equity ETFs trading in US rose yesterday.

ASIAN Markets this morning: - Consolidation

Flash Purchasing Manager’s Index has started coming in. Services and manufacturing in both Japan & Australia rebounded strongly for June’20. But on trade front things are getting tricky, US trade official’s comment today morning that US China trade deal is “Dead” and subsequent retraction of that statement caused volatility in Asian markets. The indices are now back in positive territory where they started the day. European and US futures are also back in black. SGX Nifty is trading at around 10350 levels which is about 40 points above yesterday’s Nifty close.

Calendar Events:

There are no major regular economic data to be released today

India : What is in DIIs mind?

DIIs booked profit with heavy volumes yesterday while FIIs net purchase in cash market was lower. Higher levels in Nifty are witnessing profit booking after three days of up move. Heavy weights witnessed profit booking in the last of trading yesterday.

How will Nifty perform today? Lets find out here

Disclaimer: Author is not responsible or liable, directly or indirectly, for any form of damages whatsoever resulting from the use (or misuse) of information contained in or implied by this posting. This should not be relied on as a source of financial, investment or trading advice. What works for one individual may not work for anyone else. Always consult and check with your financial advisor. I am an active trader therefore I have conflict of interest with whatever I have mentioned here.

Markets ended in bullish note

Snap from morning premarket blog:
"Nifty is close to the bull channel top and formed a “doji star” candle yesterday with low volumes. Yesterday’s top 10400 seems to be a place where institutional investors are booking profit. Therefore, I expect markets to stay below the bull channel top i.e. around 10450 while 10K offers a good support on downside. Profit booking is likely to stop Nifty from breaking out of 10500 today.

Those who are holding spreads that benefits from sideways market may continue to hold. However spread traders need to watch out of decisive break above 10500 or below 10K and adjust the legs accordingly."