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Indian markets could open flat to mildly higher, in line mixed and rangebound Asian markets today and mildly higher US markets on Thursday - HDFC Securities

U.S. stocks booked a third straight day of gains Thursday, despite data showing first-time applications for unemployment benefits rose last week, as investors focused on health corporate earnings reports. Even though many S&P 500 index sectors slipped, gains for several technology heavyweights, including Apple and Microsoft, pushed the index higher and close to a new

The Labor Department said initial jobless claims rose by 51,000 to 419,000 in the seven days ended July 17 — the highest level in almost two months. Existing-home sales rose 1.4% to a seasonally adjusted annual rate of 5.86 million in June, the National Association of Realtors said Thursday. Compared with June 2020, home sales were up nearly 22.9%, though the year-over-year comparisons are skewed by the onset of the COVID-19 pandemic last year. The median sales price of an existing home rose 23.4% year-over-year to a record $363,300.

Coffee futures soared 10% on Thursday, with prices posting their largest single-session gain since early 2014 and their highest settlement in more than six years, as drought and frost threaten coffee crops in Brazil, the world’s largest coffee producer. India's federal cabinet approved plans on Thursday to allow 100% foreign direct investment in state-run oil companies in which a strategic stake sale is announced, a move to help privatisation of Bharat Petroleum Corp, two government sources said.

Shares in Asia-Pacific were mixed in Friday morning trade as investors monitored Chinese tech stocks in Hong Kong after regulatory concerns resurfaced. Bloomberg News reported that Beijing is considering harsh penalties on ride-hailing giant Didi.

Indian equity markets jumped sharply after a three day fall following a bounce in the global markets and return of risk appetite. The Nifty scored the biggest one day gain in 2 months. Nifty finally closed with a gain of 1.23%. Nifty is on the cusp of the downgap area formed on July 19. If this downgap is filled and we move above 15883, then the path to further upmove opens up towards the 15915-15962 band.

Daily Technical View on Nifty

Sharp comeback of bulls from the lows..

Observation: After showing a sharp weakness on Tuesday, Nifty witnessed an excellent upside bounce on Thursday and closed the day higher by 191 points. The intraday decline of mid part has turned out to be a buy on dips opportunity and the Nifty closed near the highs. The opening upside gap remains unfilled. A long bull candle was formed on the daily chart after a long bear candle of previous session. This pattern indicate a sharp comeback of bulls from the lower levels. After the formation of false upside breakout of the consolidation around 15900 levels, the Nifty displayed a false downside breakout of the trend line and previous swing low support of 15635. This is positive indication.

The market is now placed at the hurdle of opening downside gap of 19th July at 15850. This area is going to be a trend decider for the short term. The upside breakout above this gap resistance at 15885 levels could negate the short term negative status of the market and that could open a new all time high above 15962 levels.

As per the pattern of range movement, the false breakouts of either extremes could results in underlying reaching to opposite extremes. The false upside breakout of 15900 has resulted in Nifty reaching a lower range of 15635 in a short period of time. Now the false downside breakout of a lower range at 15635 could possibly pull the market towards 15962 or higher in the near term.

Conclusion: A sharp comeback of bulls on Thursday after a few sessions of decline seems to have changed the negative sentiment of a short term trend. Further sustainable upside above 15880 levels is likely to confirm another attempt of new all time highs above 15960 levels in the near term. Any failure to sustain the highs could trigger downward correction from the lower top. Immediate support is placed at 15725.

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