Nifty May Open In Red Following Subdued Global Cues Amid Renewed EU Geo-Political Concern & A Neutral BOJ; Nifty Need To Sustain Over 9680 Area For Any Further Rally Amid Mixed Q4 Earnings And GST & NPA Policy Concern

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

SGX-NF: 9585 (-24 points)

For the Day:

Key support for NF: 9600/9565-9530

Key resistance for NF: 9640/9680-9770

Key support for BNF: 23050-22800

Key resistance for BNF: 23275-23400

As par early SGX indication, Nifty Fut (June) may open around 9585, down by almost 24 points following tepid global cues. There was renewed concern for Greece default & Grexit (?), an early Italian election and probability of a “Hard Brexit” (UK PM has indicated that Britain may not accept any unfair treatment/negotiations with EU for its divorce). Also, there was some unconfirmed market buzz about another NK missile test early in the morning today (??).

There was also some comments by Japan's ruling party coalition partner, calling for maintaining present neutral policy (no more QQE) after Kuroda(BOJ), which is helping USDJPY (risk trade) to drive lower (Japan coalition partner: Says any new BOJ governor should avoid dramatic change). As a result, yen is gaining strength and Japanese market (Nikkei-225) is trading lower; China & Hong Kong is closed today. Some dovish comments by Draghi yesterday are also causing EURUSD to drift lower.

Back to home, domestic market was under pressure yesterday after World Bank’s subdued forecast about prospect of Indian economy & high fiscal deficit/Govt loan (state & center combined). Market may be also cautious due to mixed Q4 earnings so far, lack of policy clarity about GST & NPA; but may take some support from the arrival of monsoon today (although it may be already discounted).

Hints for actionable trading ideas for NF & BNF:

Time & Price action suggests that, Nifty Fut (May) has to sustain over 9680 area for further rally towards 9725-9770 & 9825-9865 in the short term (under bullish case scenario).

On flip side, sustaining below 9660-9640 area, NF may fall towards 9600/9580-9530 & 9475-9425 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 23275 area for further rally towards 23400/23500-23650 & 23875-24000 area in the near term (under bullish case scenario).

On the flip side, sustaining below 23225 area, BNF may fall towards 23050-22800 & 22650-22450 area in the near term (under bear case scenario).

SGX-NF