Nifty May Open Almost Flat Amid Muted Global Cues Ahead Of Fed And Domestic Mixed Q4 Report Cards & No Rating Upgrade From Fitch

Market Mantra: 03/05/2017 (08:30)

SGX-NF: 9355 (+14 points)

For the Day:

Key support for NF: 9305-9245

Key resistance for NF: 9425-9475            

Key support for BNF: 22150-21950

Key resistance for BNF: 22525-22675

As par early SGX indication, Nifty Fut-I may open around 9355, slight in green following muted global cues amid a holiday thinned Asian session (Japan/China/SK closed today). Overnight US market also finished almost flat with some pressure on auto & energy stocks. Tech shares also fall after market hours amid tepid report card from Apple.

Overall US auto sales figure for April’17 also flashed as below expected. Oil came under intense selling pressure following news of Libya’s production resumption amid restoration of some geopolitical stability there and Saudi’s comments that they are comfortable with Brent price of $45, whereas average price of the same is around $50 for the last few weeks. Clearly, Saudi is taking some aggressive stance for oil as after the OPEC cut agreement, their market share has lost to some extent. Later, a surprise draw down report from US API has helped the oil to limit the deep loss.

Despite tepid US economic data, USDJPY is finding some bids, may be because of hopes for passage of Trumpcare bill & repel for Obamacare. Also, some comments by US TSY Sec advocating for a longer tenure bond (30Y TSY) may be helping the USD at this moment. All eyes now on the Fed’s statement today to gauze Fed’s appetite for a June rate hike. As most of the US economic data for the last few months is quite subdued, Fed may take some dovish (less hawkish than expected) stance amid significant uncertainty about Trumponomics. Thus, probability of a June rate hike may diminish after Fed today and USDJPY may fall, resulting in a global “risk off” mode.

Back to home, after yesterday’s Fitch disappointment regarding a rating hike for India, all eyes may be on the ongoing earning session and ICICI Bank’s report card today.

Hints for actionable trading ideas for NF & BNF:

Time & Price action suggests that, Nifty Fut (May) has to sustain over 9425 area for further rally towards 9475-9510 & 9550-9600 in the short term (under bullish case scenario).

On flip side, sustaining below 9405-9385 area, NF may fall towards 9335/9305-9270/9245 & 9200-9140 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 22525 area for further rally towards 22675-22800 & 23000-23200 area in the near term (under bullish case scenario).

On the flip side, sustaining below 22475 area, BNF may fall towards 22250-22150 & 21950-21750 area in the near term (under bear case scenario).

 SGX-NF