Nifty Fut (Aprl): 7825-7890 Zone May Be A Big Hurdle After Best Monthly Rally In The Last 4 Years

Looking at the chart, NF (LTP:7784) has to sustain above 7825-7875-7890 zone for further rally up to 7980-8015 & 8050-8080 in the short term.

On the other side, sustain below 7780-7720, NF will be weak and may further fall towards 7680-7590 & 7540-7400 in the next few trading sessions.

Trading Idea: NF-Apr

SGX-NF: 7746 (CMP)

NSE-NF: 7784 (LTP)

Either sell below 7780 or on rise around 7825-7875-7890;

TGT: 7720-7680*-7590-7540*-7400-7345-7305-7275 (5-15 days)

TSL>  7915 

( SL +/- 25 points from TSL)

Note: Consecutive closing (3 days) above 7915 for any reason, NF may further rally up to 7980-8015* & 8050-8080 in the short term (alternative bullish case scenario from the current trading level).

Nifty rallied by over 13% in the last one month on the back of  "above expected" budget and apparent G-10 co-ordinated monetary easing/stimulus (BOJ/ECB/PBOC) or "above expected" dovish stance/speech by Fed.

Now analysts are debating that whether Fed is "Federal Bank Of America" or "Federal Bank Of China" as the current Fed stance clearly undermines all the Fed projections/dot plots etc and market should only look the China/Oil jitters for any further clue. 

By intentionally deprecating the USD against all the major G-10 currency and specially Chinese Yuan, Fed is basically trying to give China more time to adjust its monetary policy/USD out flow concern and at the same time weak USD also help US business/export. 

Clearly, Fed is very nervous about the global market stability or the recent turmoil after its Dec'15 token hike and is in no mood to hike further, at least till Dec'16, after the new US Govt will form.

All the recent Fed drama may be indicating that Fed will never hike again and may again return to the ZRIP, if not NRIP (like Japan hiked once around 1975 (?) and then revert back) !!  

But all the dovish talks may be also indicating that Fed is not at all confident on the global economy (China/Oil/metals/EU/Brexit etc) and US growth is also not so strong to return to the targeted 2% inflation in the US. Also, there is virtually no wage inflation in US, which may translate into much bigger consumer spending.

Now, even after too much dovish talk, SPF rallied less than 1% and it may be also an indication that market is not interested for more QE, but looking for actual economical growth. 

Back to our market, its almost anticipated that RBI may cut by 0.50% this time and looking ahead, Q4 earnings, prediction & progress of monsoon, forthcoming state election results and ability of the govt to pass the important reform bills in the RS will dictate the trend.

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