Bank Nifty Fut (July):18250-18450 May Be A Big Hurdle; Real Jitters Of "Rexit" & "Brexit" May Not Be Over And "Stressed Assets" May Continue To Grow With Uneven Economic Recovery

BNF: 18150 (LTP)

Sell on rise around 18200-18300 OR around 18450-18550

TGT: 18000*-17900-17700-17590-17400*-17150-16900*-16820-16750-16520-16240*-16150

(5-15 days)

TSL> 18350 OR > 18600

Note: Consecutive closing (3 days) above 18600 for any reason, BNF may further rally up to 18750-18950*-19050-19285* in the near term (alternative bullish case scenario from the current trading level).

Some of the headwinds may be:

1.Govt's recapitalization plan for the PSBS may be too little and too late. 

2. Today's cabinet reshuffle may not enthuse the market at all.

3. In the absence of strong PSBS, Who is going to fund the "India Growth" story ?

4. Stressed assets may reach 15% of the overall loan books for the PSBS by FY-17.

Some of the tailwinds may be:

1. Loosening of AQR/PCR norms after "Rexit"; but that will not solve the basic issues of NPA.

2. Repo rate cut by 2% by targeting WPI instead of CPI by FY:17-18; but any drastic rate cut may cause massive bond market sale also as basic inflation issues will be there. 

Analytical Charts:

Article Courtesy: Frontiza.com