Technical & Macro Analysis Of Indian & Global Market----: Market Mantra (Nifty Fut/Bank Nifty Fut/USDINR/SPX-500): 26/09/2018

The Indian market (Nifty Fut-I/India-50) closed around 11097 Tuesday, jumped by almost +0.90% and bounced back from an earlier low of 10909 after the Indian government and its “plunge protection team leader” LICI vowed to do “anything required” to bailout IL&FS (at any cost) to prevent further contagion effect in the financial market.

The market sentiment was also boosted after the government “urged” the RBI to cut CRR in addition of more OMO/bond buying (Indian version of QE) to ease liquidity crisis and bailout the stressed NBFC/HFC sectors. Although the Indian stock market jumped, bond and FX market was not so much convinced as basically the government is now panicking for the whole situation.

The Indian stock market is now a victim of surging USDINR, boiling oil (Brent around $82) and skyrocketing bond yield (above 8%, comparable to Greece in their crisis period). The effect of global QT and Fed’s dual QT (rate hikes and B/S tapering) coupled with higher borrowing costs in India are now taking its toll and the market could have moderation in the forward earnings (EPS) and PE, which is already quite stretched above 27.50 against its historical/reasonable PE of 18-20 with an average EPS growth below 10% for the last few years despite “Modinomics”.

Looking ahead, the huge NPA divergence between RBI audits and that of the big private banks could also rerate the private banks & financials, which is one of the pillars of the Indian market.

Updated: 09:15

Nifty-SGX-NF: 11149 (+62; +0.56%)

Bank Nifty-BNF: 25619 (+276; +1.09%)

USDINR-I: 72.60 (-0.10; -0.15%)

SPX-500: 2927 (+6; +0.21%)

Fut-I (Key Technical Levels)

Support for NF:

11100/11040*-10995/10965-10940/10900-10850/10790-10750/10700

Resistance to NF:

11150/11180*-11200/11275-11295/11345-11385/11415-11475/11505

Support for BNF:

25450/25200*-25000/24900-24650/24400-24100/24000-23800/23650

Resistance to BNF:

25750/25850*-26050/26150-26250/26350-26575/26700-26850/26950

Support for USDINR-I:

72.40/72.00*-71.50/71.25-70.95/70.70-70.50/69.95-69.60/69.15

Resistance to USDINR-I:

72.90/73.05*-73.25/73.75-74.25/74.50-75.00/75.65-77.50/79.70

Support for SPX-500:

2915*/2905-2885/2860-2840/2815-2790/2750

Resistance to SPX-500:

2945*/2960-2990/3010-3035/3070-3095/3155

Technical View (Nifty, Bank Nifty, USDINR-I, SPX-500):

Technically, Nifty Fut-I (NF) has to sustain over 11200 for a further rally to 11275/11295-11345/11385-11415/11475 in the near term (under bullish case scenario).

On the flip side, sustaining below 11180-11150 NF may fall to 11100/11040-10995/10965-10940/10900-10850/10790 in the near term (under bear case scenario).

Technically, Bank Nifty Fut-I (BNF) has to sustain over 25850 for a further rally to 26050/26150-26250/26350-26575/26700-26850/26950 in the near term (under bullish case scenario).

On the flip side, sustaining below 25800-25750 BNF may fall to 25450/25200-25000/24900-24650/24400-24100/24000 in the near term (under bear case scenario).

Technically, USDINR-I has to sustain over 72.40 for a further rally to 72.90/73.05-73.25/73.75-74.25/74.50-75.00/75.65 in the near term (under bullish case scenario).

On the flip side, sustaining below 72.00, USDINR-I may fall to 71.50/71.25-70.95/70.70-70.50/69.95-69.60/69.15 in the near term (under bear case scenario).

Technically, SPX-500 has to sustain over SPX-500 has to sustain over 2950-2960 for a further rally to 2990/3010-3035/3070-3095/3155 in the near term (under bullish case scenario).

On the flip side, sustaining below 2945, SPX-500 may fall to 2915/2905-2885/2860-2840/2815 in the near term (under bear case scenario).

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