Market Mantra: 11/08/2017 (09:00)
SGX-NF: 9760 (-118)
For the Day:
*Key support for NF: 9695/9665-9605***
*Key resistance for NF: 9775-9830***
*Key support for BNF: 24250/24090-23890***
*Key resistance for BNF: 24500-24700***
*Hints for positional trading:*
*Time & Price action suggests that, NF has to sustain over 9830 area for
further rally towards 9895-9950 & 10020-10065 area in the short term
(under bullish case scenario).***
*On the flip side, sustaining below 9800-9775 area, NF may fall towards
9695-9665 & 9605-9560 area in the short term (under bear case scenario).***
*Similarly, BNF has to sustain over 24500 area for further rally towards
24700-24850 & 25050-25150 area in the near term (under bullish case
*On the flip side, sustaining below 24450 area, BNF may fall towards
24250-24090 & 23890-23790 area in the near term (under bear case
As par early SGX indication, Nifty Fut (Aug) may open around 9760,
almost down by 118 points tracking subdued global cues amid simmering
NK-US tensions and China-India border standoff at Doklam. Yesterday,
Trump renewed his NK rhetoric again by commenting that his previous
“Fire & Fury” reference may not be enough for Kim and NK must get their
act together; otherwise things will happen to them, they never thought
In the process, Trump also vowed to increase the US defense budget by
billions of dollars in an attempt for increased fiscal spending for the
US economy!! But, his defense secretary preferred to take more
diplomatic approach to tackle this NK issues, stressing that tragedy of
a war well known and that a military conflict could be catastrophic.
NK, on the other side vows to mercilessly wipe out the provocateurs
(Trump), saying that US will suffer a shameful defeat!!
Among all these games of war-mongering, China’s stand may be neutral if
NK first attacks US military base and US/SK retaliates; but if US &
SKcarry out any pre-emptive strikes against NK to overthrow Kim and try
to change the current pattern of the Korean peninsula, China may not be
silent spectator and will prevent them from doing so.
Thus, all these lingering NK-US geo-political tensions coupled with
terrible US PPI data yesterday and some dovish script from Fed’s Dudley
is making the USDJPY lower and it plunged below the 109 mark ahead of
crucial US CPI data today; appeal of safe heavens of Yen, EUR, Gold has
made the risk trade off and moreover a surging EUR is negative for the
global stocks in addition of strong Yen and other export heavy Asian
From the overall NK narratives so far, it seems that Trump may keep his
“Fire & Fury” momentum for some more days as it’s very helpful to keep
the USD down to make “America Great” and also to divert attention of the
core issues of US economy & his failure to peruse legislative agenda
like Trumpcare & US debt ceiling issues in addition of poor visibility
of Trumponomics rhetoric (US tax reform & fiscal spending).
Overnight, US market (DJ-30) also closed lower around 0.93% down
tracking NK tension flare up, terrible US economic data, lower USD and
slump in FANG/Tech stocks coupled with some muted earnings. At a glance,
SPX-500, which is now trading around 2435 has immediate support of 2420
and sustaining below that 2400 area may be clearly visible as of now.
Back to home, Indian market may be in further stress from the ongoing
China-India border stand-off at Doklam, which may take serious turn as
some complex geo-political issues and business interest of China is
involved there (CEPC-BIMSTEC road connectivity)much to the dislike of India.
Apart from further SEBI “Shelling” and concern of muted/mixed Q1
earnings & stretched valuations, RBI’s dividend to the Govt of around
Rs.30656 cr vs expectations of around 1 lakh cr (DeMo profit?) and prior
figure of around Rs.65600 cr may be very disappointing and may also
cause a big fiscal hole despite upbeat indirect tax collections and
improved tax/GDP ratio as a fall out of DeMo.
Overall, keeping in view the May’2019 general theme, Govt may continue
its war on black money/corruption narrative by digging more on Shell
cos, which may be a perfect vehicle for money laundering and also by
linking every financial transaction with UID & GST.
Govt may be extremely right in its approach ethically & morally, but it
may not be good for the overall Indian market & economy structure. But
again, today’s pain may be tomorrow’s gain; for the time being margin
funding issues because of “Shelled cos” may be turning into a serious
headwind, especially for the HNI heavily leveraged retail investors/traders.
Thanks & Regards,
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