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

The S&P 500 index and Dow Jones Industrial Average lost ground Wednesday after back-to-back winning sessions, but the Nasdaq Composite climbed to its 16th record close in 2021, as investors focused on inflation and last week’s more hawkish policy update from the Federal Reserve. Stocks struggled for direction Wednesday, a day after Federal Reserve Chairman Jerome Powell testified before a House committee, reassuring investors that the central bank expects rising inflationary pressures to prove transitory.

A reading of the U.S. current-account deficit climbed 11.7% to $195.7 billion in the first three months of 2021. The IHS Markit U.S. flash manufacturing purchasing managers index rose to 62.6 in June from 62.1 in May, while the U.S. flash services PMI fell to 64.8 in June from 70.4 in the prior month. The flash U.S. Composite PMI Output Index posted 63.9 in June, down from 68.7 in May. In Europe, IHS Markit reported its flash eurozone composite PMI increased from 57.1 in May to 59.2 in June, its highest since June 2006, indicating a third successive month of accelerating output growth as the economy continued to open up from COVID-19 related restrictions.

Asian stocks opened mostly steady Thursday after U.S. shares moved in narrow ranges as traders digested commentary from Federal Reserve officials on the outlook for stimulus. In a repeat of the previous day’s trade, Indian benchmark indices opened higher, but gave up the gains and ended in the negative towards the close on June 23. At close, the Nifty was down 85.80 points or 0.54% at 15687.

Nifty formed an engulfing pattern on daily charts which is bearish for the near term. 15840-15900 remains a tough resistance to breach as has been seen over the past 7 odd sessions. On falls so far 15675 has provided support; but now the figure could shift to 15451-15560. Low volumes continue to suggest low trading interest due to low volatility in largecap and midcap space. This is despite individual stocks showing momentum on successive days.

Daily Technical View on Nifty

Nifty : Profit Booking Near All Time High

Yesterday, Nifty failed to register new all time high above 15901.60 Nifty hit an high of 15862.95 and saw a profit booking throughout the day Yesterday’s Open and high of Nifty were identical, which kept a pressure on bulls throughout the session. Nifty closed near the session’s low with bearish candle on the daily chart Advance Decline ratio was at 2:3 in NSE Indicators and Oscillators have been holding bearish setup on the daily charts

Nifty Daily Line Chart has developed bearish head and shoulder pattern, which would confirm its bearish breakout if Nifty sees a follow up selling in today’s session. Close below 15680 would confirm the neckline breakdown of head and shoulder pattern On the higher side, unless Nifty takes out 15900 resistance, we should remain cautious At 15674, Nifty has retraced 50% of the entire swing which was seen from 15450(18 June Low) to 15895.75(22 June High). Below 15674, Nifty could slide down to 15620 support, which happens to be 61.8% retracement.

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