Monday, 12 June 2017

Nifty May Open Almost 65 Points Gap Down Following Tepid Global/Asian Cues Ahead Of A High Probable Fed Hike This Week And US & UK Political Concern; All Eyes May Be On The CPI Data & A High Probable GST Disruptions

Market Mantra: 12/06/2017 (08:30)

SGX-NF: 9618 (-65 points)

For the Day:

Key support for NF: 9605-9560

Key resistance for NF: 9670-9715

Key support for BNF: 23600-23300

Key resistance for BNF: 23750-23875

As par early SGX indication, Nifty Fut (June) may open around 9618, almost 65 points gap down following tepid global/Asian cues. Overnight, on Friday US market closed mixed amid sudden selling in FANG/Tech stocks in the last hour on concern of lofty valuations & subdued outlook. But, banks & financials has supported the SPX-500 to some extent tracking roll back of Dodd Frank rules.

Early morning Asian market cues were negative amid fall in USDJPY on “dovish hike” concern by Fed this week, ongoing UK & US political squabbling and reports of some fake Chinese economic data from some provinces. Overall, although Comey’s testimony last week lacks the necessary fire power for an immediate impeachment of Trump, it may open a barrage of “war of words”, similar testimony of Trump and further investigations of some of the allegations made by Comey. In UK, a hung Parliament & a coalition Govt may only increase the political uncertainty, which may also affect the global risk-on sentiment, which is so far limited only to GBP.

Back to home, market will focus on GST implementation and market may be concerned of any disruptions, considering so much complex structure & compliance costs for the same. After RBI looked less hawkish last week, all eyes may be on the CPI data today after market hours (EST: 2.60%; prior: 2.99%).

Hints for actionable trading ideas:

Time & Price action suggests that, Nifty Fut (May) has to sustain over 9605 area for further rally towards 9650/9670-9715 & 9750-9825 in the short term (under bullish case scenario).

On flip side, sustaining below 9580-9560 area, NF may fall towards 9530/9505-9475 & 9425-9385 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 23700 area for further rally towards 23875-24000 & 24100-24150 area in the near term (under bullish case scenario).

On the flip side, sustaining below 23650 area, BNF may fall towards 23450-23300 & 23050-22950/22750 area in the near term (under bear case scenario).


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