Nifty May Open In Green Following Positive US Market After Dovish FOMC Minutes; Market May Stay Cautious Amid Lingering Ind-Pak LOC Tensions, Lack Of Clarity Of GST & NPA Policy Coupled With Mixed Q4 Earnings

Market Mantra: 25/05/2017 (08:30)

SGX-NF: 9405 (+30 points)

For the Day:

Key support for NF: 9360/9330-9280

Key resistance for NF: 9455-9515

Key support for BNF: 22450-22300

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Key resistance for BNF: 22675-22800

As par early SGX indication, Nifty Fut-I may open around 9405, almost 30 points up following positive/mixed global cues. Overnight, US market closed in positive (+0.36%) as investors cheers (??) gradual tapering of Fed’s balance sheet (QE bonds) and rate hikes depending on incoming US economic data. Overall, FOMC minutes may be termed as quite dovish and June rate hike probability may be also in doubt (although FFR now indicating 80% rate hike probability, up from 75% before FOMC minutes). As a result, USD/US bond yields doomed; but SPX-500 is showing divergence (risk-on mode); may be because of short covering ahead of testimony by Comey for Trump’s alleged Russian connection issue.

Back to home, oil being one of the vital factors for the Indian economy, all eyes may be on the OPEC-NOPEC meeting later in the day. A 9 month extension is already discounted by the market to a large extent; so even if it will be a 9 month extension, one may expect oil to hover around 50-55$ range in the coming days, which may put some pressure on the Indian macro economy. A 6 month extension may result is heavy selling for oil (positive for India).

Indian market will also digest the news of scrapping of FIPB to respective ministries, which may result in quicker FDI flows (?) along with ongoing Ind-Pak LOC tensions.

Hints for actionable trading ideas for NF & BNF:

Time & Price action suggests that, Nifty Fut (May) has to sustain over 9475 area for further rally towards 9515/9535-9575/9600 & 9680-9770 in the short term (under bullish case scenario).

On flip side, sustaining below 9450 area, NF may fall towards 9360/9330-9280 & 9240-9205 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 22675 area for further rally towards 22800-22900 & 23000-23075 area in the near term (under bullish case scenario).

On the flip side, sustaining below 22625 area, BNF may fall towards 22450-22300 & 21950-21800 area in the near term (under bear case scenario).

 SGX-NF