Bank Nifty Fut (June): Ahead of RBI rate cut--18880-20720 or 18714-18152 (Don't look at GDP @7.5% but look at GVA @6.1%)

Technically, BNF (LTP: 18774) has to sustain above 18825-18880 zone for an immediate target of around 18990-19130 area. Consecutive closing above 19130, BNF may scale 19210-19316-19576 & 

20155-20600-20720 zone in the near term under bullish case scenerio.

On the flip side, sustain below 18775, BNF may fall to 18714-18672 zone immediately. Consecutive closing below 18672, it may fall further to 18599-18450-18341-18236-18152 & 18020-17600-17286 zone in the bear case scenerio.

Bottom Line: Technical Trading Levels (Positional)

BNF-JUNE	LTP	18774
	SL >/< 25 POINTS	FROM SLR
			T1	T2	T3	T4	T5	SLR
Strong >	18825		18880*	18990	19130*	19210	19316-576	<18775
Weak <	18775		18714-672*	18599	18450*	18341	18236-152	>18825

Now it is almost certain that RBI may cut rate @0.25% tomorrow, if not 0.50%. Although as par Friday's GDP Q4 no @7.5%, made India the "Fastest Growing Economy" in the world at this moment, surpassing even China, other co-related economic indicators are diverging from that headline GDP data. If one consider GVA, the same is moderated to 6.1% (Q4) from 6.6% (Q3). GVA (Gross Value Added) may be more reliable & appropriate measurement of economic growth rather than new series GDP. Basically, GVA is a measure of economy's total output minus consumption; i.e. the value of goods and service produced in the economy after factoring out taxes & subsidies.

The RBI Gov is also not a fan of new GDP series and he may look at GVA rather than headline GDP number. Theoretically, no central bank Gov will indulge in rate cut with GDP @7.5% and CPI around 5.5%. If one calculate GDP in the old scale, the same may be around 5.5% (with initial gap around 2%).

There may be four situations for tomorrow RBI event:

• Rate cut @0.25% + Dovish RBI (hinting another 0.25 cut in Dec'15)----market may zoom to 8900-9000 zone.
• Rate cut @0.25% + Hawkish RBI (hinting inflation threat/monsoon/US rate hike possibility)---market may zoom to 8510-8675 & then fall.
• Rate cut @0.50%----markets may zoom to 9000-9200 zone (irrespective of RBI tone).
• No rate & SLR/CRR cut (Same status + Hawkish/Dovish RBI)----market may fall to 8200-8000 level.

Also, banks may pass on another tranche of base rate cuts (0.15-0.25%) for further transmission of previous rate cuts already happened.

RBI Gov is a known hawk & market may already discounted 0.25% rate cut. So, it will be the guidance of RBI, which may dictate the market. A more hawkish RBI tone, may prove to be another case of "Buy the rumour & sell the news" going ahead.