PreMarket Analysis: 21 July

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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Heavy selling by DIIs. What will it do to Nifty?

Premarket analysis: 21 July 2020


  • Positive news on economy, stimulus and vaccine

  • Quarterly results are turning out to be better than expected

  • Risk-on mood in global markets is unabated


  • Virus scare on economic recovery remains

Global Markets: -Up again

Developed markets ended in green yesterday. Overnight news flow has been positive. Corona virus vaccine is closer to reality and US announced fresh round of stimulus amounting to USD 1 trillion. European union is closer to agreeing on recovery fund. Additional stimulus from developed markets will ultimately flood emerging markets in search of higher returns. Understandably, the ultimate safe haven US dollar continued its down trend down, after breaking down from symmetrical triangle pattern. Other safe havens Japanese Yen and Gold against US dollar was in sideways coil mainly on account of dollar weakness. Volatility index is continuing to trend down.

ASIA this morning: - Positive

Asian markets including China’s Shanghai opened in green this morning. European and US futures are in green as well. SGX Nifty is trading more than 100 points above yesterday’s Nifty futures close.

Calendar Events:

There are no major economic data release scheduled for today.

India : -Why DIIs are still booking profit?

FIIs bought heavily on cash market yesterday while DIIs equally sold in heavy volumes. DIIs are also holding considerable short position on derivative open interest while large proprietary traders are slightly on short side. It seems that DIIs are looking to take advantage of the better than expected results season and book some profit. FIIs are firmly on long side in derivatives open interest as well

How will Nifty perform today? 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.