Monday, 17 July 2017

Nifty May Open In Deep Green Amid Mixed Global Cues Tracking Blockbuster China GDP & Strength In Yuan And Subdued US CPI & Retail Sales Data/Dovish Fed; NF Has To Sustain Over 9985-10005 Area For Next Leg Of Rally From Here As Earnings Has To Justify The Steep Valuations

Market Mantra: 17/07/2017 (09:00)

SGX-NF: 9935 (+35 points)

For the Day:

Key support for NF: 9925-9880/9855

Key resistance for NF: 9985-10005

Key support for BNF: 23950-23750

Key resistance for BNF: 24000-24115

Time & Price action suggests that, NF has to sustain over 10005 area for further rally towards 10050-10115 & 10195-10250 in the short term (under bullish case scenario).

On the flip side, sustaining below 9985-9955 area, NF may fall towards 9880/9855-9790 & 9715-9670 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 24000 area for further rally towards 24115-24250 & 24250-24450 area in the near term (under bullish case scenario).

On the flip side, sustaining below 23950 area, BNF may fall towards 23750-23600 & 23500-23300 area in the near term (under bear case scenario).

As par early SGX indication, Nifty Fut (July) may open around 9935, almost 35 points gap-up, tracking mixed global/Asian cues after China strengthen its Yuan band against USD and a blockbuster China GDP data this morning, which came as 6.9% for Q2CY17 against estimate of 6.8% (prior: 6.9%). Also, China IIP & Retail sales came upbeat; although Chinese official economic data always lacks some credibility, nevertheless, today’s data may be indicating steady & improving momentum of the economy.

But, PBOC today also strengthen the Yuan band from 6.78 to 6.75 following tepid US economic data on Friday (CPI & Retail sales) and also after today’s upbeat China economic data, PBOC may maintain its prudent neutral monetary policy to deleverage the China economy in the foreseeable future. Thus, China market (SSE) may be under some pressure today and that may be dragging the Asian market sentiment to some extent; Japan is closed today.

Overnight US market (DJ-30) was closed at another record breaking levels (+0.39%) celebrating a dovish Fed after subdued US economic data, which may force Yellen to stay on the side line till Dec’17; but Fed may start its QE tapering from Sep’17. On Friday, mixed results from the banks & poor NIM & guidance dragged the US market to some extent.

Back to home, although Indian market is at striking distance to conquer the 10k Nifty Mt’ Everest on the back of positive global cues, hopes of an Aug cut by RBI, forced short covering by P-notes FNO, good monsoon, incremental reforms by the Govt, ultimately earnings need to catch up with the stretched valuations, which is being elusive for the last few years despite various green shoots narratives.


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