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Indian markets could open flat, in line with mixed Asian markets today while US markets were shut on Monday..…HDFC Securities

U.S. markets were closed on Monday to mark the Independence Day holiday. World stocks stayed close to record highs on Monday as investors weighed surging European business activity and a welcome U.S. jobs report against worries about the highly transmissible Delta variant of COVID-19.

The STOXX index of 600 leading European companies was 0.3% higher, reversing earlier losses after data showed euro zone businesses expanded activity at the fastest rate in 15 years in June. IHS Markit’s final composite Purchasing Managers’ Index (PMI), seen as a good gauge of economic health, jumped to 59.5 last month from May’s 57.1, its highest level since June 2006.

Oil prices rose on Monday, driven higher after the OPEC+ group of producers again called off talks on output levels, failing in its third attempt to resolve a deadlock on increasing production, and leaving the oil market facing tight summer supplies and rising prices. Oil prices rose to fresh multiyear highs after the OPEC meeting was called off. Brent was up 94 cents, or 1.2%, at $77.11 a barrel Monday afternoon, trading around 2-1/2 year highs

Asian stocks opened steady Tuesday as traders weigh a jump in crude oil amid an OPEC+ crisis that derailed a deal to boost output.

Indian benchmark equity indices ended higher for the second consecutive day on July 5. At close, the Nifty was up 112.20 points or 0.71% at 15,834.40

Nifty rose for the second straight day with a gap up and closed near the intra-day high. This along with a positive advance decline ratio has meant some more upside potential in the near term. 15870-15915 could be the next resistance for the Nifty while 15777 could be a support. Volume expansion, if it happens soon, will help in sustaining the upmove.

Daily Technical View on Nifty

Confirmation of bullish reversal

Observation: After showing an upside bounce from the lows of 15635 levels on Friday, Nifty shifted into a decent upmove on Monday and closed the day higher by 112 points. After opening on an upside gap of 71 points, Nifty showed follow-through upmove for the entire session. Intraday dip of mid part has turned out to be a buy on dips opportunity. The opening upside gap remains unfilled. A reasonable positive candle was formed with minor lower shadow. Technically this pattern indicate a confirmation of bullish reversal pattern, post formation of hammer on Friday. Technically this pattern signal uptrend continuation for the short term. The low of Friday at 15635 could also be considered as a new higher bottom of the sequence. Hence, one may expect Nifty to reach up to the crucial overhead resistance of around 15900 and higher and higher in the next 1-2 sessions. Nifty on the weekly chart witnessed minor weakness in the last week, after a formation of long bull candle in the previous week. The upmove of this week is expected to surpass the crucial overhead resistance of the last three weeks at 15900 levels

Conclusion: The upmove of Monday seems to have confirmed the bullish reversal of Friday and one may expect upmove towards 15900 levels or higher in the next 1-2 sessions. The upside area of 15900-16100 is going to be crucial to sustain for the short term. Any lack of strength to sustain the highs is likely to result in another downward correction from the highs. Immediate support is placed at 15740.

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