Nifty Futures 28th 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 28th Nov 2016

Nifty Futures / SGX Nifty today bounced back well and along expected lines. As per our analysis we once again reiterate that longer term we remain very bearish for targets of 5872 but in the immediate near term we do not expect much downside from current prices and we could even see some bullish moves in the near term but keep in mind that the rally will be a trade in and trade out, this move will not be a longer term move and it will only be in there for the short term, longer term we remain very bearish and we do see a crash but as of now we do not see much downside so please understand our view correctly. The day we see the pullback coming to a end we will once again take short selling positions and we may choose to trade in and out during this current ongoing move. It is not that we are not bearish from a medium term perspective we are and we are not denying that but as things stand right now we do not see dooms day scenario in the near term. If you are only trading on the basis of this post please use appropriate risk management and then only trade. Please do not over trade.

This week SBI cut bulk deposit rates to record lows and any person who has been studying the correlation between bulk deposit rates and RBI repo and reverse repo rates will safely conclude that in the near term the interest rates are heading lower and significantly lower from current levels. We will not be surprised to see rate cuts to the extent of 150 bps in the next few months and we think RBI could front load that rate cut in the coming policy or may be even outside the policy meeting to reduce the pressure on the Govt of India.  In the immediate term we see a rate cut by 50 bps and that will not be the end of it we could even see a extremely dovish commentary post the rate cut of 50 bps. So please keep that in mind that over the next few months we will see much lower rates from the RBI and the banks will also be forced to cut PLR and deposit rates very aggressively. The impact of lower rates on corporate balance sheets will be very powerful in the near term so see sharp PAT increases in corporate profits based on lower interest cost in the near term. Longer term we do not think this will translate into much as demand has been affected and as per what we have seen unorganized sector is steadily loosing to organized sector.  The local bhajji wallas etc are loosing business to the big bazzar and hyper city in a extremely rapid manner so expect organized retail shops like big bazzar and hyper city and online guys to benefit immensely  from this move at the cost of the local chaps.

As far as RBI indirectly increasing the CRR for banks we do not see much impact for banks in the near term. We have to wait for more clarity from the RBI on the reason behind such a move.

Sugar we remain very bullish and we have been adding ugar sugar and we reiterate that we see good value in ugar sugar in the near term and longer term. Crude Oil too we remain very bullish from medium term perspective and we have been trading in and out in crude oil futures.

Good Trading to You!