Nifty Fut May Open Around Record 9190 (Record High) Celebrating Another Holi In Dalal Street After Thumping Win Of NAMO/BJP In UP; 9225-9275 NF May Be A Big Hurdle For The Day As Valuations Looking Quite Stretched Despite Hopes Of Big Bang Reforms

Market Mantra: 14/03/2017 (08:30)

Watch 9195-9125 & 9225-9275 Zone In Nifty Fut (March), Which May Open Around 9190 Today

As par early SGX indication, Nifty Fut (March) may open around 9190 (+236 points), almost 2.6% higher from its LTP following far better than expected margin of win by BJP in UP; market may be expecting around 200+ seats this time; but BJP got 312 seats in UP. Thus the initial market euphoria may be like 2014 general election; but as valuations are expensive at 9200 level of Nifty (PE will be around 23.90 at TTM EPS of 385), one may expect some profit booking (long unwinding & fresh shorts) from such level despite hopes of big bang reform by BJP Govt.

Although, this UP election will not change any RS equation in the near term as seats will be vacant only after 2018-19 and BJP will get RS majority only after 2019. But, INC & other opposition parties may also not choose to obstruct any reform bill including GST this time as their political position is worst. Thus, now all the onus of reform bill passage & its speedy implementation may be on the Govt and market expectations will be very high to deliver big bang reforms by the Govt/BJP. But, the Govt/BJP may not believe in any big bang concept and most probably it may employ its traditional method of incremental reforms.

Apart from Indian politics, market may also focus on the WPI & CPI data today along with hosts of global geo-political & central banks events, including high probability of a Fed rate hike tomorrow (??). Domestic market will also keenly watch GST council meeting on 16^th March and its actual format & implementation trajectory from July-Sep’17.

Hints for actionable trading idea:

Time & Price action suggests that, Nifty Fut (March) has to sustain over 9225 area for further rally towards 9275*-9350 & 9550-9685 for the day/ in the short term (under bullish case scenario).

On the other side, sustaining below 9195 zone, NF may fall towards 9125-9075 & 9035-8995/8960 area for the day/ in the short term (under bear case scenario).

Similarly, BNF (LTP: 20796), which is expected to open around 21350 level tomorrow after gap up opening,  has to sustain over 21500-21675 area for further rally towards 21855-22150 & 22350-22715 area for the day/ in the near term (under bullish case scenario).

On the other side, sustaining below 21350 area, BNF may fall towards 21150-20900 & 20700-20500 zone for the day/in the near term (under bear case scenario).

 SGX-NF