Nifty May Open Slightly Lower Amid Tepid Global Cues After Renewed Geopolitical Tensions As China Reportedly Deployed Troops At NK Border For Any US Aggression; Watch 9180-9165 Zone In NF Closely As Vital Support Of The Day

Market Mantra: 11/04/2017 (08:30)

SGX-NF: 9185 (-24 points)

Key support for NF: 9180/9165-9135/9095

Key resistance for NF: 9255-9305

Key support for BNF: 21340-21240

Key resistance for BNF: 21675-21775

As par early SGX indication, Nifty Fut (Apr) may open gap down around 9185 following renewed geopolitical tensions with NK-US & China. As par unconfirmed reports, China may be mobilized around 1.5L troops in response to a proposed US-SK joint military exercise in the region. Also, Russia has reportedly cut all the communication links with US in Syria; although US is now downplaying the Syrian missile strikes as “one off”, it may be also planning to dislodge the pro Russian Assad regime there to establish “politically” someone of its “own”. Thus, US may be deeply involved in the Syrian matter to “fight” ISIS and basically to regain control over the key oil pipelines there. As a result, fund is flowing from the risks of EQ & USD to the safety of US TSY Bonds & safe heaven currency like Yen; risk trade is off now.

Yellen’s speech yesterday was nothing new but overall may be termed as slightly dovish with expectations of the USD bulls. Apart from gradual hiking depending upon the trajectory of US economy in the coming days, overall speech of Yellen & also other Fed speakers may be also indicating an imminent tapering of QE bond holdings in Fed’s balance sheet and may be also indicating a gradual end of easy money policy of Fed.

Back to home, all eyes may be now on the Q4FY17 earning season in which market may not be so much optimistic due to various apprehensions like recent strength in INR (almost 40% Nifty earnings may be related to overseas); spillover effect of DeMo as there was several exceptions/opportunities available in Q3 to channelize old DeMo notes. Also, uncertainties about GST may also force the companies & traders to reduce the inventory level in the coming days due to no clear policy date about Input Tax Credit. A high probability of deficient monsoon this year on the back of renewed El-Nino concern may also dampen the sentiment of the market in the coming days.

Technically, for NF, consecutive closing below 9180-9115 for few days may be also bad for the current bullish momentum of the overall market.    

Hints for actionable trading idea: Nifty & Bank Nifty Fut

Time & Price action suggests that, Nifty Fut (Apr) has to sustain over 9180-9225 area for further rally towards 9255-9305 & 9375-9425 in the short term (under bullish case scenario).

On the other side, sustaining below 9165 area, NF may fall towards 9135-9095 and further 9040 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 21350 area for further rally towards 21450-21650 & 21775 area in the near term (under bullish case scenario).

On the other side, sustaining below 21300 area, BNF may fall towards 21100-20900 zone in the near term (under bear case scenario).

 Analytical Charts: SGX-NF