Premarket Analysis: Are the Nifty bulls tired?

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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Premarket analysis: 14 July 2020


  • Uptrend in global markets is intact

  • Emerging market assets are holding gains

  • FIIs net bought a small quantity in cash market yesterday


  • DIIs booked profits with heavy volumes yesterday.

  • WHO warned that virus infections may get worse and worse

  • Muted expectations on quarterly results.

Global Markets: -Consolidating near top

European markets closed in solid green yesterday and are re-testing recent top. US market closed slightly in red. High yield bonds and Emerging markets ETFs traded in US were negative. Copper prices and other industrial metals are holding gains. Gold fell marginally. US Dollar and Japanese Yen are subdued and are in sideways coil. VIX index went up.

ASIAN Markets this morning: - Sideways and marginally in red

After yesterday’s gain, Asian markets have turned lower today. Chinese Shanghai Index is consolidating its recent stellar gains. European and US futures are trading marginally higher this morning in Asia session. SGX Nifty is trading about 60 points below Nifty futures’ close yesterday.

Calendar Events:

CPI came in at 6.09% that was higher than estimates of 5.3%. Whole sale price inflation is to be released today and it is expected to be negative 2.40% Vs previous reading of -3.21.

India : -Tired bulls

DIIs booked profits with heavily volumes yesterday while FIIs bot a small quantity. The retail demand seems to be absorbing all the profit booking by DIIs so far. DIIs, FIIs and large proprietary traders are holding short position in index derivatives (Open Interest). Although FIIs have moderated selling in cash market, they seem to be adding protection to their long position by going short in derivative markets.

The implied volatility is skewed. Puts are much costlier than calls. Volatility curve should ideally be like smile where both ends of OTMs have higher volatility while ATM have lower volatility.

How will Nifty perform today? Lets find it out HERE

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