Nifty May Open Gap Down As The Global Market Is Under Trump’s “Fire & Fury” & Escalated NK Tensions; Indian Market May Be Further Under Stress Amid “Shell Cos” Fiasco

Market Mantra: 09/08/2017 (09:00)

SGX-NF: 9965 (-39)

For the Day: 

Key support for NF: 9940-9890

Key resistance for NF: 10020/10065-10115

Key support for BNF: 24500-24250

Key resistance for BNF: 24900-25150

Hints for positional trading: Strategy-SELL ON RISE

Time & Price action suggests that, NF has to sustain over 10020 area for further rally towards 10065/10115-10155 & 10205-10275 in the short term (under bullish case scenario).

On the flip side, sustaining below 10000 area, NF may fall towards 9940-9890 & 9825-9770 area in the short term (under bear case scenario).

Similarly, BNF has to sustain over 24950 area for further rally towards 25050-25150 & 25250-25500 area in the near term (under bullish case scenario).

On the flip side, sustaining below 24900 area, BNF may fall towards 24700-24500 & 24250-23900 area in the near term (under bear case scenario).

As par early SGX indication, Nifty Fut (Aug) may open around 9965, gap down by almost 39 points tracking subdued global cues amid escalation of NK-US geo-political tensions. As par some intelligence reports from both US & Japan, NK may have acquired a miniature nuke head technology compatible with its ICBM; i.e. it may have now a nuke capable ICBM/missile.

Following this NK report, Trump has threatened the nation with “Fire & Fury, the world has never seen before” and in response, NK may have also indicated to attack a US military island (Guam). Thus, all these ongoing NK geo-political tensions has made the risk-on sentiment adverse, USD has gone lower despite an upbeat JOLTS job openings report yesterday; JPY, Gold & also EUR has seen some safe heaven flows.

US market (DJ-30) closed lower (-0.15%) yesterday and SPX-500 also closed 0.24% lower, the most in the last 30 days as a result of NK geo-political jitters. But EU market yesterday closed upbeat, well off the evening lows after EUR tumbled as a result of solid US economic data (JOLTS) and some buzz of an early resolution of the Trumpcare fiasco; but EU futures are now trading lower amid escalation of NK tensions & some rebound in EUR.

Back to home, Indian market may try to cover some shorts after opening lower today; but SEBI need to come forward and clarify the “Shell cos” fiasco clearly as almost Rs.9000 cr may have been stuck by the investors in those scrips; in any way, even if SEBI clarified about this “Shell cos”, the credibility of the overall market, specially mid & small cap cos may be in disarray in the days ahead as Govt may continue its ongoing war on corruption/black money ahead of 2019 general election.

Various banks may be also in focus because some of these so called “shell cos” may have also significant exposure to the banks. Apart from earnings, all eyes may be on the China border issues, which may turn serious in any day amid escalation of “war of words” between the two countries.

 SGX-NF