Nifty View: September

The markets saw a very negative month in August with the rupee crashing, gold rallying and the stock markets being hammered. Banking sector has been continuously hammered from the 3rd week of May and has not seen any decent retracement or pull back since then. The fall has been close to 35% and totally one way. Whats in for September? Can we see some consolidation and pullback in the coming weeks?
The major concerns for the market are:
  1. Depreciating rupee
  2. Stagnation in growth of the economy
  3. Hindrance in reforms, Socialist approach by the government
  4. QE Tapering by the FED
  5. Lack of investor confidence (Especially after NSEL issue)
CNX Nifty
Nifty has created a strong support at 5100 levels and this level could hold for some time now. On the upside, a break above 5550 can 5660, 5750 levels. Nifty's range for the coming month as per our view is 5250-5750. After a huge volatile month, we feel some relief could be seen. We don't expect nifty to cross 6000 in the coming months, nor do we expect 4800 to break. Whatever the trend, we shall ride the trend and stay as profitable as possible. Some people are coming up with 4800 level predictions, but we won't give any such targets. Whatever the market sentiment be: Bullish or Bearish, it is advisable to not have any bias to one side and thus, we don't give any such targets.

Bank Nifty
Bank Nifty has been hammered beyond any expectations and has been oversold for a long time now. Though a correction is due, it won't be advisable to predict any correction in this case. If BNF breaks and closes above 9310, then the targets come upto 10,000-10,400 levels. Support for BNF is 8800 and below that 8300 is the next major support. BNF has been enormously volatile and has given 300-400 points at every trend break and this is what every trader looks forward to. We shall look for trades whenever they arise. But the major trend of BNF is very bearish and it shall remain bearish till 10800 doesn't break. Also, the next RBI policy could very well see a hike in interest rates which could create further bearish momentum.

Options are trading at very high premiuims and thus it will be better to trade in futures atleast for this month. Those with no big risk appetite must play safe and sit on cash rather than risking their capital. 

Globally too, all emerging markets are in a bearish mode and it will impact Indian markets as well.
Bovespa (Brazil)
Bovespa is a major index tracked by big global institutions and a good indicator of sentiments of their view on EM. Bovespa could see 10%-15% more downside if it breaks 49,300 and this could put pressure on any pull backs in our markets too. The tensions in Syria have also started impacting developed markets too and a bearish tone has set in on European markets too which stood strong till now. The rising crude could pose a big threat to all markets in the coming months.
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