01-01-1970 12:00 AM | Source: HDFC Securities Ltd
Nifty has closed at the highest in 5 sessions showing the strength of the recovery - HDFC Securities
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Indian markets could open mildly lower following largely negative Asian markets today, and flat US markets on Tuesday HDFC Securities

The Dow Jones Industrial Average and S&P 500 indexes ended at all-time highs Tuesday, notching back-to-back closing records, as U.S. stock benchmarks extended their winning run as investors faced an onslaught of corporate earnings reports. The S&P 500 index has advanced for nine of the last 10 sessions as third-quarter earnings reports have largely topped expectations.

The S&P CoreLogic Case-Shiller Home Price Index showed that home prices increased nationally 19.8% from a year ago in August, roughly in line with the previous month’s increase. U.S. new-home sales increased 14% to an annual rate of 800,000 in September. The Conference Board said its U.S. consumer confidence index rose to 113.8 in October from a revised 109.8 a month earlier. The gain follows three straight declines in sentiment.

Asian stocks fell Wednesday as traders weighed the latest U.S. earnings reports and a jump in Australian core inflation that again highlighted intensifying price pressures in the global economy. In China, authorities told billionaire Hui Ka Yan to use his personal wealth to alleviate China Evergrande Group’s deepening debt crisis. The U.S. also cranked up tensions with Beijing by banning China Telecom (Americas) Corp. Industrial profits in China surged 16.3% year-on-year in September.

Nifty closed higher for the second consecutive session on October 26. At close, the Nifty was up 0.73% or 132.2 points to 18257.6. Nifty has closed at the highest in 5 sessions showing the strength of the recovery. Advance decline ratio was sharply positive. However, volumes were on the lower side. Resumption of volumes with upmove could lead to Nifty rising towards 18377-18445 over the next few sessions. 18099-18125 is an important support band for the Nifty

 

Daily Technical View on Nifty

Much awaited upside bounce..

Observation: After showing weakness in the last few sessions, Nifty witnessed sharp upside bounce on Tuesday and closed the day higher by 143 points. After opening with a positive note, the market made an attempt to move up in the early part of the session. Sharp intraday weakness got triggered from the highs in the early-mid part of the session and the sustainable upside bounce was witnessed in the afternoon to later part of the session. A long bull candle was formed on the daily chart, which indicate a formation of reversal pattern of the recent down trend. Tuesday's upmove could be a confirmation of higher bottom reversal at 17968, which is a swing low of Monday. This is positive indication and one may expect further upside in the short term. As happened in the past, there is a higher possibility of Nifty revisiting a recent all time high of 18605 levels.

The crucial moving average of 10day EMA has been regained during upside bounce, after a downside violation in the previous session. The 20day EMA has acted as a crucial support in last session and that support resulted in a convincing upside bounce on Tuesday.

Conclusion: The market seems to have bounced back after a weakness of the previous 4 sessions. The confirmation of higher bottom reversal is likely to pull Nifty towards 18600 levels in the coming week. Immediate support is placed at 18200 levels.

Nifty – Daily Timeframe chart

 

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