Trading Idea: BNF-Apr
LTP: 16230
Either sell below 16175-16450 or on rise around 16550-16650-16850;
TGT1: 16050-15930*-15845-15715-15567*-15468
TGT2: 15360-15205-15140-14950-14835-14700*
TSL> 16900
(5-15 days; SL=+/- 50 points from TSL)
Note: Consecutive closing (3 days) above 16900 for any reason, BNF may further rally up to 17050*-17150-17350-17450 & 17600-18050 in the near term (alternative bullish case scenario).
Although we are seeing great bull run (short squeeze ??) globally fulled by co-ordinated CB actions from mid-February and power of liquidity (Fed/ECB/BOJ/PBOC).
Technically, SPF(CMP: 2090) now has to sustain over 2110-2135 zone for more rally up to 2195-2265; otherwise will come down towards 2040-1995 area.
Clearly this is a co-ordinated & well planned movement/strategy between the 4 major central bankers of the world and going forward, Fed may take some hawkish stance for re-balancing of FX equations (EUR/USD/JPY/CNH) as EQ market (SPF) is near the all time high and China, Oil also stabilized to some extent after Jan-Feb sell off.
A weak USD and excessive strong EUR/JPY and other G-10 currencies are increasingly causing headwinds for many G-10 countries and the equation has to be re-balanced to some extent for future co-operation/co-ordinated action.
Back to home, banks are expected to be under pressure for some more quarters as RBI may be determined to clean their balance sheets by FY-17 (RBI-AQR).
As par some estimates, Q4FY16 may reveal more stressed assets for around Rs.10 lac cr against previous estimate of Rs.8 lac cr and by FY-17, we may see it as Rs.15 lac cr (as on Q3FY16, its more than Rs.4 lac cr).
Present Punjab FCI fiasco is showing that GOI need to compensate FCI (food subsidy A/C) on real time or cash accounting basis and not by present system of accrual accounting. The amount (around of around Rs.1 lac cr O/S at any point of time) need to be properly accounted in the fiscal deficit accounts also along with 7PC amount for a fair reflection of true picture.
Analytical Charts:
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