Bank Nifty Fut(Sep): Watch 15750-600 Area; Sustaining Below That It May Fall Towards 14700-14000 Zone, Otherwise Expect Some Dead Cat Bounce

Trading Levels: (Positional)

As prepared 08/09/2015 (Morning):

BNF-Sep	LTP	15800
SL=+/-	25 POINTS	FROM SLR
			T1	T2	T3	T4	T5	SLR
Strong >	15800		15950*	16230	16310	16410	16535-680	<15750
Weak <	15750		15600*	15330	15190	15100	14985-700	>15800

Now BNF today made a high of  16490 and closed around 16413 (LTP).

For today & next few days:(09/09/2015)

BNF-Sep	LTP	14413
SL=+/-	25 POINTS	FROM SLR
			T1	T2	T3	T4	T5	SLR
Strong >	16550		16680-850	16950	17130*	17287	17400-660	<16500
Weak <	16500		16313-230	16037	15790*	15700-650	15400-125	>15800

Rationale:

BNF was under severe pressure in line with broader market meltdown & global (China) jitters. Also, there was a RBI draft guidelines which proposed some changes in calculation methodology for bank's base rate calculation (from previous averaging method to marginal cost of funds). This may impact NIM of the banks in FY-17 and par various reports, this may cause around Rs.20000/ cr one time hit for the banks, if implemented in its present form. Considering the huge one time effect, RBI may ultimately permit the banks for proper adjustments in books of the banks over a period of time rather than a one time effect.

Now, yesterday's meeting of the industry leaders with the Govt (PM) has created a change in sentiment among the stakeholders and market participants. As par reports, industry also pressed for urgent rate cut in the meeting where RBI Gov was also present. We may see 0.50% repo cut and some other measures (CRR/SLR/MSF cut etc) on 29-th Sep (RBI policy date), if not earlier (after 17-th Sep, Fed policy date). 

As par Fed fund rate, there is little probability of  any hike in Sep and all eyes will be on Dec'15.

Our Govt may announce GST session by this week itself for passage of GST bill as it may be able to garner direct/indirect support for GST through back door talks with the oppositions & Cong. If, insurance bill could pass despite no majority of BJP in RS, then GST bill also can be passed also.

These events (dovish Fed/GST/RBI Rate cut) are sufficient itself to pop up our market by at least 5-10% in the near term as we are extremely oversold till yesterday.

Technical Analysis & Charts:

As par simple EW analysis in monthly chart, BNF might be in A wave now (after 1-5 & A-B-C) and the projected target of the same may be around 15800 or 15000 (extended correction in A). It has made the recent low of around 15790 till date.