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

U.S. stock benchmarks scored a turnaround Wednesday, ending higher for a second day, as technology stocks found a footing and signs of progress emerged in Washington on the debt ceiling debate.The Dow DJIA rose by about 102 points, registering the biggest intraday turnaround for the blue-chip index since Dec. 21, 2020. The price-weighted index had been down by as much as 1.3%, or 459 points, at Wednesday’s low.

The 10-year Treasury note pulled back to 1.524% Wednesday after briefly climbing intraday to about 1.58%, its highest since June. Natural-gas futures fell 10% Wednesday, after Russian President Vladimir Putin said his country would boost supplies of the fuel to ease European shortages a day after they soared to a 12-year high.

Democratic senators signalled that they were receptive to an offer from Senate GOP leader Mitch McConnell that would allow an emergency extension into Decembe

In U.S. economic data, a report from Automatic Data Processing Inc. showed that 568,000 private-sector jobs were created in September, outpacing estimates from The Wall Street Journal for 425,000. For the data due on Friday on non farm payrolls, economists expect the economy added a net 500,000 jobs in September, up from the disappointing 235,000 jobs added in August, according to a Wall Street Journal poll. The unemployment rate is expected to tick down to 5.1% from 5.2%.

Asian shares rallied on Thursday, taking heart from a late recovery on Wall Street after U.S. politicians appeared near to a temporary deal to avert a federal debt default and as Russia reassured Europe on gas supplies, calming volatile markets.

Nifty snapped a two day winning streak on Oct 06 driven lower by weak global cues. At close Nifty was down 0.99% or 176.3 points to 17646. Nifty has formed a lower top on a short term basis. It has also formed an engulfing top on daily charts which has bearish connotations. The weak advance decline ratio also suggests wide spread profit taking. Even if the global markets show some recovery, Nifty could after a small recovery again run into profit taking. Investors may keep taking a part of their profits and raise cash, while traders can keep strict stoplosses and keep reducing their positions.

Daily Technical View on Nifty

Nifty : Bearish Engulfing Candle On Daily Chart

* Nifty made a daily high of 17884 and then witnessed significant selling during the session.

* Nifty ended the session with a loss of 1%, to close at 17646

* Nifty has formed bearish “Engulfing” pattern on the daily charts. 

* Yesterday’s high of 17884 would remain as a strong resistance for the Nifty now.

* Unless Nifty surpasses 17884, view would remain bearish on Markets

* Breadth of the Market remained weak yesterday

* Nifty Midcap and Smallcap both closed on a weak wicket and have formed bearish “Engulfing” pattern

* Indicators like MACD has also turned bearish with negative crossover on its signal line on daily charts

* SGX Nifty is suggesting possible gap up opening of more than 100 points

* It would be advisable to utilize gap up opening for exiting long positions. Around 17750, trades can initiate fresh short positions, with the stoploss of 17850 in Nifty.

Nifty – Daily Timeframe chart

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