Nifty May Open Almost Flat Following Tepid Global Cues Ahead Of Crucial US CPI & Retail Sales Data & Mixed Domestic Q4 Earnings So Far; Skymet warning over better prospect of monsoon may also affect the market sentiment today

Market Mantra: 12/05/2017 (08:30)

SGX-NF: 9440 (+3 points)

For the Day:

Key support for NF: 9425/9390-9340

Key resistance for NF: 9485-9515            

Key support for BNF: 22700-22550

Key resistance for BNF: 23000-23075

As par early SGX indication, Nifty Fut-I may open around 9440, almost flat following tepid global cues. Overnight US market also closed almost flat (-0.11%), although off the deep lows after better than expected PPI data. But overall sentiment was very gloomy amid terrible Q1 numbers of some of the leading retail giants, which may also undermine the underlying US economic recovery as it is indicating poor retail sales and subdued consumer spending & sentiment.

In that sense, today’s CPI & retail sales data for US may be very crucial for Fed to take some clues about the June rate hike and communicate with the market accordingly as FFR is now indicating almost 90-100% of a June rate hike with barely a month in hand for Yellen to telegram properly. Any late dovish stance by Fed may be proved as a disorderly volatility for USD & “risk on” sentiment later. Despite blockbuster headline US NFP, wage growth may be still tepid in US, which in turn may also be affecting disposable income, discretionary spending and overall retail sales (consumer spending) & GDP for the economy.

Back to home, Indian market may be celebrating early for the better than expected monsoon by the IMD (as SKYMET has warned against “irrational exuberance”). Apart from monsoon, GST implementation from July’17 (?), ongoing NPA reform/resolution process, market may also focus more on the Q4 report card of Indian corporate, which is so far termed as mixed; Nifty is trading around TTM PE of 24, may be assuming a 24% CAGR of EPS for FY-18, which may be quite tough to achieve, considering both short & long term trend and various macro economic factors.

Q4 TRACKER 60 / 200 (Nifty 200)

STRONG24

IN LINE 22

WEAK14

Hints for actionable trading ideas for NF & BNF:

Time & Price action suggests that, Nifty Fut (May) has to sustain over 9485 area for further rally towards 9515-9550 & 9600-9680 in the short term (under bullish case scenario).

On flip side, sustaining below 9465 area, NF may fall towards 9325/9390-9340 & 9295-9245 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 23000 area for further rally towards 23075-23200 & 23405-23475 area in the near term (under bullish case scenario).

On the flip side, sustaining below 22950 area, BNF may fall towards 22825-22700 & 22550-22450 area in the near term (under bear case scenario).

 SGX-NF