Nifty Futures 21st Nov 2016

SGX Nifty Futures

LTP   10,940.00   +26.00 +0.24% High 11,041.50 Low 11,001.00 (Change Vs Today’s Nifty Futures (NSE) Closing)

SGX Nifty

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Nifty Futures 21st Nov 2016

Nifty Futures / SGX Nifty continued their correction after giving a faster retracement over the last falling segment on 9-10th Nov (The previous falling segment top was at 8560 spot Nifty levels mentioned) and post that sharp rise we have been seeing a steady decline but what matters to us is that the speed of the decline with respect to the rise is much more slower and hence we do not see this wave heading lower down straight from here in the near term. As per our analysis our overall view remains the same. Longer term we remain bearish for targets of 5872 and in the immediate term we do not see the wave heading down straight from here so in our analysis we see a very choppy move taking place on both sides. We see sharp up moves and sharp down moves but overall near term direction will remain up and overall longer term direction will remain down so trading in and out should be done.  Please keep in mind that from a investment point of view this will not be a buy and hold game it will be a trade in and then out game but it is not recommended to buy stocks at current prices from a longer term perspective.

In the near term the Banks are getting deposits at such a rapid pace that Reserve Bank of India will be forced to cut interest rates by at least 50 bps immediately and all the Banks are expected to drop their deposit rates and lending rates also by around 50-75 Bps in the near term and we see this news event coming out very soon as Banks are being flushed with deposits and even if the account holder wants to withdraw cash from his account he is not allowed to do so or rather there is far less cash in the system than what is needed so net effect is Banks will be forced to pay interest to all those depositors so that will in the near term boost the market sentiment from a news flow stand point not that we track or follow news but as per our understanding a 0.50 Bps rate cut is coming from the RBI sooner than expected by most people. SBI yesterday did lower their deposit rates by 0.15 bps and we expect all banks to cut their deposit and PLR (Prime Lending Rate) anywhere between 0.50-0.75  Bps in the near term.

Ugar sugar posted bad set of numbers but we still remain very bullish on Ugar sugar and if you have bought Ugar sugar below 38 then we do not see any reason for worry. On declines short term investors can buy and hold Ugar sugar. Renuka sugar too has corrected and the results this time have been good. We expect that Renuka sugar will continue posting better set of numbers in the coming time and we remain very bullish on Renuka sugar also. Overall the sugar space will remain very bullish and companies like Ugar who have good sugar stock with them will continue to do well. The sugar shortfall is severe and in southern India there will be no sugar cane to crush beyond Jan 15th so we do expect sugar prices to keep moving higher from here too.

Good Trading To You!