Nifty May Open Almost Flat Following Mixed Global Cues; All Eyes May Be On The MFG PMI & Monthly Auto Sales Data After Yesterday’s Terrible Q4 GDP No

Market Mantra: 01/06/2017 (08:30)

SGX-NF: 9625 (-4 points)

For the Day:

Key support for NF: 9595/9560-9530/9510

Key resistance for NF: 9645-9680/9700

Key support for BNF: 23150-22950

Key resistance for BNF: 23400-23500

As par early SGX indication, Nifty Fut (June) may open around 9625, almost flat following mixed global cues. Overnight US market also closed almost flat, but off the lows following mixed economic data (poor pending home sales; revised/corrected Chicago MFG PMI data mess). US market was under some pressure due to guidance warning from BOAML & JPM (Banks) and overall soft economic & inflation data. Fed’s June rate hike may depend on Friday’s NFP data and that too may be a “one off dovish hike” for 2017. Fed’s Beige book commentary was also not so much upbeat about overall US economy; although Fed sees some inflation pressure.

In the morning Asian session, China surprised the market with a steep devaluation fixation of USDCNY around 6.80, apparently to gain control over the Yuan to prevent outflow and flush out the bears (huge short positions). China market is down for strength in Yuan, but Japan is up due to some strength in USDJPY and upbeat PMI data. Also, today’s tepid Caixin MFG PMI data from China below boom/bust line of 50 has kept the pressure on China market for concern of economic slowdown.

Back to home, after terrible GDP data yesterday, all eyes may be on the MFG PMI (EST: 52.70) and monthly auto sales data.

Hints for actionable trading ideas:

Time & Price action suggests that, Nifty Fut (May) has to sustain over 9680-9700 area for further rally towards 9725-9770 & 9825-9865 in the short term (under bullish case scenario).

On flip side, sustaining below 9660 area, NF may fall towards 9595/9560-9500 & 9460-9400 area in the short term (under bear case scenario).

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

On the flip side, sustaining below 23350 area, BNF may fall towards 23150-22950 & 22750-22550 area in the near term (under bear case scenario).

 SGX-NF