SGX Nifty Futures
(Change Vs Today’s Nifty Futures (NSE) Closing)\
Nifty Futures 31st Jan 2017
Nifty Futures / SGX Nifty was seen consolidating today. As per our analysis, we once again reiterate that now is not the time to be euphoric rather it is the time to be cautious and not get carried away by what the news flow is about to come. There are important events in this week and Budget and FED both are equally important as of now most of the market is focused on what news flow comes out of the budget and we feel based on our analysis that budget will not be a game changer overall there could be some positive as far as the corporate tax rate is concerned which could be lowered and that in turn will have a direct impact on PAT and EPS for stocks especially the larger taxpaying companies but there could be some dangerous moves in this budget as far as other tax rates go. One is that we could see the Long-term capital gains tax tenure being changed from 365 days to 1096 days. So any investment below 1096 days or 3 years could be termed as a short term so that will surely have a negative impact on the markets. Second is that service tax rates are expected to move up and we feel that in line with the GST rates we could see service tax moving up to 18 percent and that will hurt sentiment even more than the long term capital tax gain move as that would mean higher bills with immediate effect for multiple sectors and services which effectively will be paid by the consumers of that service. With respect to tax slabs, we see a minor increase to 3 L as we do not see much more room for the Finance minister to provide that could just see an intraday move on the consumption related plays. We do not see much more in this budget as there is not much space to do anything more. Please keep in mind that we are not at all suggesting that Nifty can not move higher from here it sure can but will that move sustain we do not think so. Will Nifty move past 9200? As per our analysis, we do not think so. When to sell, where to sell, what to sell and how much to sell all this will have to be done correctly in order for money to be made. Once again we reiterate that this is not a blind trade zone and if you cannot handle volatility please do not trade for now as volatility will be plenty in the next few trading days.
Now, what will all this news flow do to the market? All this news flow could just see some volatility but we do not see markets sustaining on the higher side from a positional standpoint so once again we are cautioning that do not get carried away by the news flow even if minor positives like corporate tax rate comes in there are many other negatives that could come so please keep that in mind and trade. Please do not overtrade under any circumstances and please manage your risk at all times. Do not be complacent during the next few days as many important changes are taking place as of now and sharp volatility could be seen in the next few days.
Silver will be doing very well this year and crude oil also will be doing very well so in panic and at appropriate levels do watch out for both of them. Gold will also do well but silver will do better so as far as trading goes we should keep a watch on silver. There are few other commodities that will also give excellent returns and we will update our PAS clients when to buy them.
Good Trading To You!