Nifty May Open Almost Flat Following Tepid Global Cues After Trump Came With A “Water Pistol” Instead Of A “Bazooka” For His Tax Vision/Outline; Watch 530-545 Zone In Axis Bank As Technical Hurdle For The Stock After Tepid Q4FY17 Numbers

Market Mantra: 27/04/2017 (08:30)

SGX-NF: 9350 (+6 points)

For the Day:

Key support for NF: 9295/75-9215

Key resistance for NF: 9385/9435-9510

Key support for BNF: 22150-22000

Key resistance for BNF: 22305-22400

As par early SGX indication, Nifty Fut (Apr) may open around 9350, almost flat following tepid global cues after Trump disappointed the market with his one pager tax reform plan (vision-2028 ?) for US economy. In brief, there was nothing in his tax plan (outline), which is not known to the market and that is too little in details also. His tax vision of highest slab for business tax is outlined at around 33% from existing 35% + surcharge (effective around 40%), which may be significantly above market expectations around 25-20%. The rate of 15% business tax may be only applicable for small US business (SMES) and not for the “rich US corporates”. In effect, Trump’s tax plan, if implemented in its present form may cost US exchequer around $7 tln over next 10 years (as par some estimates).

Globally, all eyes may be also on the BOJ & ECB today for their policy statement with no expectation of any rate/QQE action. BOJ has just flashed it statement and kept its optimistic outlook for the Japanese economy; i.e. they are not in mood for any additional QQE in the days ahead.

As a result of Trump’s tax plan disappointment and not so dovish BOJ, USDJPY is getting weaker and “risk on” trade after the French relief rally may be over by today.

Back to home, all eyes will be on the ongoing Q4 earning numbers and an effective policy by the Govt for NPA resolution.

Hints for actionable trading ideas for NF/NS & BNF/BNS:

Time & Price action suggests that, Nifty Fut (Apr) has to sustain over 9385 area for further rally towards 9435-9475 & 9510-9550 in the short term (under bullish case scenario).

On flip side, sustaining below 9365 area, NF may fall towards 9295-9255 & 9215-9180/9115 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 22305 area for further rally towards 22400-22500 & 22675-22800 area in the near term (under bullish case scenario).

On the flip side, sustaining below 22250 area, BNF may fall towards 22150-22000 & 21900-21725 area in the near term (under bear case scenario).

 NF