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

US stocks closed mostly higher Monday, just shy of records, despite weaker-than-expected manufacturing data that dulled some of the optimism around the recovery of U.S. corporations from the COVID pandemic. U.S. equities finished mostly higher to kick off May, despite some economic data suggesting that “crazy” prices and rampant shortages of parts, materials and labor could threaten the rebound in manufacturing.

The manufacturing index from the Institute for Supply Management fell to 60.7% in April from a 38-year high of 64.7% in the prior month. The Treasury Department said on Monday that it expects to ratchet up its borrowing to $463 billion in the April-June quarter, which is $368 billion higher than previously estimated.

Asia's share markets were mixed Tuesday as regional equity investors looked to signs of recovery from the coronavirus pandemic as major economies around the world reopen.Markets in China, Japan and Thailand are closed on Tuesday for holidays

Indian benchmark equity indices recovered from the early losses on May 03 and ended on flat note in a highly volatile trade. At close, the Nifty was up 3.10 points or 0.02% at 14634.20. Nifty bounced up smartly from the intra day lows going against the Asian negative mood. 14694-14747 is the next resistance band for the Nifty while 14493 is the support level. Broader market continues to do well as is clear from the positive advance decline ratio while frontline stocks remain volatile based on institutional flows.

Daily Technical View on Nifty

Observation:

After showing sharp weakness on Friday, Nifty witnessed sustainable upside bounce on Monday and closed the day on a flat note. After opening with a downside gap of 150 points on Monday, Nifty shifted into an upside recovery in the early part of the session. The gradual upside recovery has continued for the whole session and Nifty closed near the highs. The opening downside gap has been filled completely.

A reasonable positive candle was formed with minor upper and lower shadow. Technically, this pattern indicate a comeback of bulls from the lower levels.

This could bring hopes for upside bounce from here and the day's low of 14416 could be considered as a new higher bottom formation (need confirmation). A sustainable follow-through up move could open more upside towards 14900- 15000 levels in the near term

Any confirmation of higher bottom could result in Nifty challenging the upper range of 15000 levels for the second time. Such repeated testing of the hurdle could eventually result in an upside breakout of the broader high low range.

Conclusion: The weakness of the last few sessions seems to have completed. The display of sustainable upside recovery signal more upside in the coming sessions and the crucial upper levels of 14900-15000 could be tested again in the next one week. Immediate support is placed at 14530 and further upside from here could find next upside resistance around 14750.

Nifty – Daily Timeframe chart

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