Nifty Fut(Aug): Next Big Upside Only Abv 8595-8675 For 8760-9030, Otherwise 8325-8200 Zone Again On The Card--RBI Tone & GST Might Be The Triggers

Technical Charts:

Technical Analysis (Time & Price):

NF (LTP: 8572; SGX : 8582) has to sustain at least over 8595 for an immediate target of 8620-8653-8675*. Only consecutive closing above 8675, NF may target 8710-8760* and sustaining above that, it could scale up to 8875-8950-9030-9200 zone in the near future (bullish case scenario).

On the downside, inability to sustain above 8595, NF may face selling pressure and could drift to 8529-8466 zone. Sustain below 8466, NF may further fall to 8410-8326* area and consecutive closing below that 8250-8209-8136 might be the target in the coming days (bear case scenario).

Technical Trading Levels (Positional):

		Gap Up/Dw	(Indicative)
SGX NIFTY	8582	10
				NF-JULY	LTP			8572
	SL (+/-) 10 POINTS	FROM SLR
	Intraday Swing	Trader
			T1	T2	T3	T4	T5	SLR
Strong >	8620		8653-75*	8710-60*	8800-20	8850-75	8900-50	<8600
Weak <	8600		8553-29*	8490-66*	8446-10	8366-26*	8290-50	>8620
FOR	Conservative	Positional	Trader
			T1	T2	T3	T4	T5	SLR
Strong >	8620		8675*	8760*	8875	8950	9030-200	<8600
Weak <	8600		8529*	8466*	8410	8326*	8250-09	>8620

Some Inputs:

Nifty and more specifically, Bank Nifty gave a nice rally for the last two/three trading sessions by respecting immediate positional support of 8326 on the back of some positive news flow like proposed EPFO investments in our stock market (through PSU ETF), Govt's recapitalization plan for ailing PSBS (Rs.70000 cr over next three years) and hopes of GST & RBI dovish tone.

All eyes will on tomorrow's RBI event, though there is little hope for a rate cut, any other liquidity booster package (like CRR/SLR/MSF rate cut) will ignite the market. In any way, RBI tone will also be important (hawkish or dovish) for an expected rate cut in next policy meetings (Oct-Dec'15 & Feb'16). Market is expecting another 0.50% cut by FY16.

As par some estimates, India's Nifty PEG ratio is one of the highest (0.73) and made us the 2-nd most expensive in the emerging market indices (EM), just behind Shanghai.

PEG=(PE/EXPECTED GROWTH IN EPS)=(22/30)=0.73 (in case of Nifty)

No doubt, we are expensive, but we have "safe heavens" appeal too, specially after China debacle. There is no dearth of liquidity globally and its up to our Govt to quicken various reform with a consistent policy and there by attracting huge investments from investors awaiting on the side line.

Looking ahead, GST & land bill implementations in one form or other along with majority in RS for the NDA will be vital for an overall change of sentiment but we also need the actual growth in real EPS for the corporate India by H2FY16.