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Indian markets could open higher, following positive Asian markets today and sharply higher US markets on Thursday - HDFC Securities 

Major U.S. stock-market benchmarks climbed Thursday, lifting the S&P 500 index and Nasdaq Composite to new records as better unemployment data, falling coronavirus cases and deaths, some upbeat corporate earnings and the prospect of more fiscal stimulus augured well for further economic recovery this year.

Initial jobless claims for the past week came in at 779,000 (lowest since November), better than the expected 830,000 and better than the previous week’s 812,000. Separately, U.S. factory orders for manufactured goods rose 1.1% in December after a 1.3% gain in the prior month. The Bank of England kept its stimulus programme unchanged on Thursday. The BoE maintained its Bank Rate at 0.1% and left the size of its total asset purchase programme at 895 billion pounds ($1.22 trillion).

The Monetary Policy Committee in India will be announcing its policy decision today. While a majority of economists expect no change in interest rates, any indication of the central bank’s plan to normalise liquidity will be closely watched.

Shares in Asia-Pacific rose in Friday trade after overnight gains in the US that saw the S&P 500 hitting a record closing high. Indian benchmark equity indices reversed losses on Feb 04 - the weekly options expiry session to end higher for the fourth consecutive session, reaching new highs in the process.

At close the Nifty 50 index gained 0.71% or 105.7 points to end at 14,895. In the process Indian indices became the best performer for the day in the Asian region. Nifty continues to make new highs on every day showing the inherent strength of the index. The fact that this is happening with large volumes and a very positive advance decline ratio is heartening. Sector and stock rotation keeps happening, but the Index seems headed higher.

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Daily Technical View on Nifty

Observation: Markets ended with healthy gains on Thursday as the rally continued post Budget. It was the fourth consecutive session of gains for the Nifty. The Nifty finally gained 105.7 points or 0.71% to close at 14,895.65. Broad market indices like the BSE Mid Cap and Small Cap indices gained more, thereby out performing the Sensex/Nifty.

Market breadth was positive on the BSE/NSE. Sectorally, the top gainers were the BSE Power, FMCG, Metal and Bankex indices. The top losers were the BSE Telecom, IT and CD indices. Zooming into the Nifty 15 min charts, we observe that the Nifty opened lower, but soon found support at the 50 period MA and bounced back from there.

The index then gradually moved higher to close near the highs of the day. With the uptrend intact, we expect the Nifty index to test the 15000 levels in the very near term. On the daily chart, we can observe that the Nifty has convincingly reversed the recent downtrend by moving up from a trend line support and convincingly closing above the 50 day SMA on Monday. With the upmove continuing, the Nifty now comfortably trades above the 20 day SMA.

The index could now attempt to make new life highs in the coming sessions. It is important that the Nifty does not move below the immediate support of 14714 on any corrections for the short term uptrend to remain intact. We recommend using a selective buying approach and accumulating quality stocks from outperforming sectors. Strict stop losses need to be kept to control risk.

Conclusion: The 1-2 day trend of the Nifty remains up with the index surging higher and the index trading above the 50 period MA on the 15 min charts. Nifty is likely to test the 15000 levels in the very near term. Our 7-day view on the market too remains bullish as the Nifty has convincingly reversed the recent downtrend by moving up from a trend line support and convincingly closing above the 20 day and 50 day SMA. Our bullish bets for the next 7 sessions would be off if the Nifty moves lower and closes below the 14714 levels.

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