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!

28 thoughts on “Nifty Futures 28th Nov 2016

  1. Dear Glen, Could you define at least tentatively if not accurately (in yrs,months,days), what you refer as short, medium and long term, as these terms are not clearly defined in any investment dictionary.

  2. The CRR increase the short term reactions will be knee jerk and I think bank nifty would be impacted for the next week till the RBI policy review.
    I would like you to write your views on bank nifty also along with these posts sir….

  3. Sir,
    As the short term trend is bullish, is it now good to assume that time that will be taken by Nifty to reach 8570 from 7930 levels (recent bottom) will be faster than the time which was taken by Nifty to fall from 8570 to 7930 levels. If that the case we may even hit 8570 around the next rbi meeting as again around fed rate hike meet, Nifty might have a negative pact.


      1. Sir, do you agree on this? The retracement from 7930 to 8550 should be in faster pace now as compared to time taken for fall from 8550 to 7930?


  4. Renuka sugar pe ratio is 7% and eps growth is 45% so as per technicals it will take 5 years for it to cross 30. Whats your technical view and targets for it for long term.

  5. Sir, previously you were expecting no rate cut rather rake hike to happen. However, now the scenario changed and you expected the rate cut now and dovishness from RBI however now RBI increased the CRR to 100% which is another jolt to banks. What a confusion going on in the market. will the uptrend still on the cards if yes to what extent.

    1. The excess deposits will have to be given out as loans that is the only way out from this problem w r t the banks. For loans to start gathering pace PLR needs to come down by at least 100 Bps so deposit rates will have to come down sharply lower by 100-150 Bps

  6. Dear Glen Sir,
    I am holding tightly the Nifty/Bank nifty calls which I entered few days before the Nov expiry. I am holding 8 Dec Banknifty 19000 CE, 8200/8500 Nifty Dec CE. However, the premium getting deteriorated fast for all the call options and it pains hard to keep hold in such choppy and bi-directional move. Do you suggest holding the pain will be rewarding !!!

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