Bank Nifty (June): 17700-18000 Zone May Be A Big Hurdle Amid Controversy With RBI Gov & "Hawkish" Fed

Trading Idea: BNF (June)

LTP: 17495

Sell either around 17700-17800 OR on rise around 18000-18100;

TGT: 17275*-17140-17015-16850-16680-16470-16300*-16220-16099-15700 (5-15 days)

TSL> 17900 OR 18200

Note: Consecutive closing (3 days) above 18200 for any reason, BNF may further rally up to 18600* and 19200-19680-20150 zone in the near to short term (alternative bullish case scenario).

Apart from some "encouraging" results of banks and monsoon factor along with global cues, BNF rallied quite smartly for the past few days, may be there is strong speculation about the RBI Gov's next tenure uncertainty (as removal of Rajan may be negative for bonds and positive for stocks because it may open taps for further drastic rate cuts).

But, basically, if Rajan is removed amid all the political controversy, it may be also negative for stocks after some whipsaw because, with no Rajan, institutional investors may loose faith on Indian economy/INR and we may see massive bond market sell off and INR may also surge to 71+ level. In that scenario, equity market may be also sold off.

In other scenario, if Rajan is kept for another term with "remote control" of the Govt (being a "Yes man"), then hopes of drastic rate cut may reduce to a great extent and we may see only one 0.25% rate cut in Aug'16 meet as ultimately, by his own word----"I am Raghuram Rajan and I do what I want to do"-----he will not let the down the "independent" structure of the RBI.

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