Bank Nifty Fut(MAY): Technical Outlook (1-5 days)

Technically, BNF (LTP: 17384) has strong positional support of around 17280. Sustain below 17280, it may fall to 17140-16950 zone. Consecutive closing below 16950, BNF may fall up to 16250 zone in the next few days.

On the upside, BNF need to sustain above 17350 for an immediate target of  17500-17605 & sustain above that BNF could scale up to 17992-18090 zone by next few trading sessions.

As par statement of our FM in RS yesterday evening that Govt. is in the process of constituting a high level panel to look into the ongoing controversial MAT issue at a priority basis. Although this may soothe the nerves of the FPI(s), some more prompt action (like asking IT dept not to pursue recovery proceedings from the FII proactively till the judicial process/panel decision is complete)  may be needed by the Govt to normalize the situation & prevent continuous FII selling in to stock & bond markets.

Havoc selling by FII(s) is causing INR to depreciate quite significantly & this is causing our market, specially BNF to slide further. As weak INR & higher crude oil prices may contribute  various macro economic factors negative for our economy and specially inflation. So in future, RBI may be not in a comfortable position to cut rates as expected by the market. 

But overall, RBI may not let the INR to go 69-70 level & it may consider 65 as an ideal equilibrium zone for the same. Technically, USDINR-I has to close above 64.25 consecutively for further up move to 69-70 zone.

There are also some assumptions that RBI may cut rate @0.25% again on out of policy date after May'12, when Indian CPI will be published & if it shows declining trend.

Bottom Line: (Positional Cyclical Trading Levels)

BNF-MAY	LTP	17384
	SL >/< 25 POINTS	FROM SLR
			T1	T2	T3	T4	T5	SLR
Strong >	17300		17500	17605*	17712	17800	17950	<17250
Weak <	17250		17140	16950*	16800	16550	16250	>17300