Nifty May Open Almost Flat Amid Muted Global Cues After News Of An Imminent ICBM Launch Preparation By NK Around Its Foundation Day On 9th Sep

Market Mantra: 04/09/2017 (09:00)

SGX-NF: 9930 (+10)

For the Day:

Key support for NF: 9910/9870-9820

Key resistance for NF: 9940-9980/10050

Key support for BNF: 24200-24000

Key resistance for BNF: 24400-24575

Hints for positional trading:

Time & Price action suggests that, NF has to sustain over 9980 area for further rally towards 10030/50-10090 & 10160-10205 area in the short term (under bullish case scenario).

On the flip side, sustaining below 9960 area, NF may fall towards 9910-9870 & 9820-9870 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 24400 area for further rally towards 24525/24575-24675 & 24775-24875 area in the near term (under bullish case scenario).

On the flip side, sustaining below 24350 area, BNF may fall towards 24200-24000 & 23850-23700 area in the near term (under bear case scenario).

As par early SGX indication, Nifty Fut (Sep) may open around 9930, almost flat tracking muted global/Asian cues after a report that NK is moving its ICBM launch pad to the west coast launch zone ahead of its “foundation day” on 9^th Sep, which seems to be a preparation for another ICBM test.

Although, it may be also a part of demonstration of its ICBM missile capability in the foundation day celebration, market is anxious about another ICBM launch over the JP airspace towards the US military base in Guam at Pacific Ocean and thus, there is again some risk aversion sentiment.

As US market was closed yesterday for Labour Day holiday, market may be also waiting for reaction from US traders in the NY session today for the overall NK nuke issues. US stock future (SPX-500) is now edged down around 2465 (-0.10%) ahead of EU opening.

Apart from geo-politics, market may also focus on ECB day after tomorrow to gauze Draghi’s appetite for QE tapering.

Indian Market May Continue To Be Victim Of “Game Of Chickens” Between Kim & Trump Despite Incremental Policy Reforms By The Govt:

Back to home, apart from stretched valuations, Indian market may be continued to be a victim of NK geo-political tensions despite incremental policy reforms by the Govt. As par updated NSE data (?), Q1FY18 TTM EPS for Nifty may be now around 384, down from around 395 in Q4FY17 and in that scenario, Nifty TTM PE may be now around 25.78, still over 2-SD of 25 and well above historical mean PE of 20.

Market may be giving benefit of doubt to the Indian market due to DeMo & GST disruptions and may wait & watch the Q2FY18 numbers to see the actual trend; till then Nifty may hover around 9700/9650-10150/10200 area and every fall due to any black swan event may be utilized for accumulation of quality scrips having reasonable valuations by the investors.

 SGX-NF