Nifty & Bank Nifty: In A Bull Market, Prices Goes Up In An Elevator While Goes Down In An Escalator-- Watch 8326-8273 & 18150 For Any Dead Cat Bounce

Technically, NF (LTP:8370; SGX : 8330) has immediate support of around 8343-8326-8290-8273-8250 zone and sustain below that there is not so much support until 8200-8180-8150-8130 area. Consecutive closing below 8130, NF may further fall to 8060-8038-8000 & 7930-7880 in the near term under bear case scenario.

On the upside, NF has to sustain at least over 8380-8410 zone for any meaningful dead cat bounce towards 8450-8495-8515-8550 area. Only consecutive closing above 8550, NF will gain more strength for a rally up to 8582-8605-8653-8672* & 8685-8700-8760* zone in the bullish case scenario.

Bottom Line (Technical Trading Levels):

		Gap Up/Dw	(Indicative)
SGX NIFTY	8330	-40
				NF-JULY	LTP			8370
	SL (+/-) 10 POINTS	FROM SLR
	Intraday Swing	Trader
			T1	T2	T3	T4	T5	SLR
Strong >	8410		8450-95*	8515-50	8582-8605	8653-72*	8700-60*	<8390
Weak <	8390		8343-26	8290-73*	8250-25	8200-180	8150-30	>8410
FOR	Conservative	Positional	Trader
			T1	T2	T3	T4	T5	SLR
Strong >	8410		8495*	8550	8605	8672*	8760*	<8390
Weak <	8390		8326*	8250*	8180	8130	8038*	>8410

Similarly, for BNF it is:

BNF-JULY	LTP	18268
SL=+/-	25 POINTS	FROM SLR
			T1	T2	T3	T4	T5	SLR
Strong >	18350		18460	18581*	18660	18800	19016	<18300
Weak <	18300		18150	18020*	17905	17850	17725-590	>18350

Our market yesterday corrected a lot amid China & global sell off and further aided by our domestic jitters like P-Note/SIT issue. There are also excuses of weak corporate earnings, parliament logjam, JP group bad loan to certain banks etc.

In China, there was an rumour that CSRC might exit the stock stabilization fund and repaying the interbank loan, which was later vehemently denied by the authority. In any way, a meaningful correction in China after one year unabated rally of around 140% is quite normal in any stock market, but the Chinese authority is going in full throttle in a desperate way to stabilize the market to behave an orderly way, so that rural China (retail clients) is not washed away completely. But, the market is very nervous about the Chinese way of controlling it ("malicious short sellers of Chinese stocks may be in deep trouble, if caught red handed!!")----is China is trying to hide something more suspicious that we don't know ? Basically, China market is now a classic tug of war between FII(s) & the China authority, but ultimately no FII will try to fight against a powerful central bank like PBOC for long.

At a glance, China-A-50 has now immediate strong technical support zone of around 10300-200 zone followed by 10000-9650 area. An orderly Chinese stock market is necessary for overall China economy & global stability, other wise a severe contagion effect could spread all over the global market, including India.

Apart from China, all eyes will be on Fed tomorrow for their FOMC minutes. Most probably, Fed will be in side line till Sep'15 and now there is around 40% probability by OIS market (Fed Fund Rate) for a possible lift off in Dec'15 with various caveats. Strong USD & low inflation along with some global jitters (like China hard landing, fragile EU/Greece etc) might be helpful for Fed to maintain its dovish stance going forward. Market will also keenly watch US core GDP on Thursday for an idea about its real economy.

For our Nifty, we might be in an extended range of 7900-8700 in the near term with different types of news flow & real corporate earnings. There is a real possibility that GST might be passed in some form or other in this monsoon session of Parliament and that may help the market in the short term. RBI might oblige only in Oct (Dewali Gift !!) and expect overall cut of 0.50% till March-April'16.