Nifty Fut (Aug): 8325-8280 Zone Is Crucial Now, Sustain Below That, We May Be Heading For 8000-7900 Area---Rate Cut & GST Hope May Help

Technical Charts:

Technical Analysis:

NF (LTP:8368; SGX:8373) has now good positional support zone of around 8325-8280 zone and consecutive closing below that, it may fall to 8245-8219 and 8154-8135 in the immediate to short term. Only sustaining below 8135, there is a high probability that NF will be further dragged to 8045-8000 & 7930-7880 territory in the near future (bear case probability).

On the upside, sustaining above 8325, NF has to break 8380-8410 area and sustaining above that 8456-8485-8513 zone might be the target in the immediate to short term. Only consecutive closing above 8513, it may further rally towards 8550-8600 & 8640-8675 territory in the near term. Further, on the up side, only consecutive closing above 8675, NF may scale up to 8760 (bullish scenario probability).

Technical Trading Levels (Positional)

		Gap Up/Dw	(Indicative)
SGX NIFTY	8368	-5
				NF-Aug	LTP			8373
	SL (+/-) 10 POINTS	FROM SLR
	Intraday Swing	Trader
			T1	T2	T3	T4	T5	SLR
Strong >	8345		8380-410*	8456-85	8513-50	8600-75*	8700-60	<8325
Weak <	8325		8299-80*	8245-19	8180-35	8075-45	8000-7930	>8345
FOR	Conservative	Positional	Trader
			T1	T2	T3	T4	T5	SLR
Strong >	8345		8410*	8485	8550	8675*	8760	<8325
Weak <	8325		8280*	8219	8135	8045	7930-7880	>8345

Some Rationale:

Its a mere coincidence that when we are trading near a charted strong supply zone (NF:8600-8675), China Yuan devaluation and GST fiasco (parliament logjam) hits us at the same time. The result is there.

Market is basically confusing for this Chinese style of QE and why it is so desperate ? Is it because China is dedicated to show 7% growth at any cost or there is something serious in its economy, that we don't know and officials are panicking ? In any way, Yuan devaluation means further cheap Chinese exports and depressed global commodity prices in the days ahead. Most probably, Fed has some excuse now to delay "planned rate hike" from Sep to Dec'15 for disinflation fear. There is a high probability that Fed continue to be in the side line even after Dec'15 for various macro economic & global factors (as USD is quite strong and hurting US economy too). Going by the depressed commodity prices and Chinese action, Canada may be in the next pipe line for its own QE among G6 countries.

Going forward, Chinese devaluation may be at the near end, as it will be prudent for them to make balancing act for its exporters and serious massive capital outflows.

Back to our home, we may see a out of policy rate cut by RBI very shortly amid this so called "global currency war" and our lower CPI figure released yesterday evening.

As the parliamentary logjam (political drama) continues and today being the last day of the monsoon session, all eyes will be on our politicians, some of whom are wasting our hard earned tax payers money. As par rough estimate, total cost of MP(s) for five years is around Rs.950 cr alone !!

In any way, if GST will be not passed today in RS, then there may be short session or even joint session of parliament to pass it, as it appears that Govt is determined now and there is huge pressure on the "responsible oppositions" to pass it either.

If GST is passed, there is a high probability that, we will head for 8675-8760 zone in the near term.

In the event, if there is no GST or any hope for it in the near future, we may be heading for 7900 zone in the immediate future too.