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Indian markets could open lower in line with negative Asian markets today. US markets were shut on Thursday due to the Thanksgiving holiday - HDFC Securities

A tech shares bounce carried European equities higher on Thursday, following similar gains on Wall Street and Asia and helped also by a small pullback in the dollar from a 17- month high. With U.S. markets closed for Thanksgiving, focus was trained on Europe where a surge in COVID-19 cases is raising the prospect of lockdowns going into the Christmas shopping season.

Emerging markets saw some relative calm after a turbulent few days that has seen Turkey's lira battered again, Russia and Ukraine tensions rise, and Mexico's president stoke worries about central bank independence by installing a virtual unknown at the helm.

Brazil’s annual inflation rose faster than expected to 7%, its highest in over a decade, adding pressure on the central bank to tighten policy further. Australia’s retail sales in October jumped 4.9% month-onmonth, seasonally adjusted, according to official estimates released Friday. That was far higher than the 2.5% increase predicted in a Reuters poll.

Asian stocks fell Friday amid caution over a new coronavirus strain and concerns over faster Federal Reserve policy tightening. Scientists in South Africa are studying the recently identified variant amid fears it could spread internationally.

Nifty opened higher on November 25 and corrected mildly to make an intra day bottom at 1000 Hrs. At close Nifty was up 0.70% or 121.2 points at 17536.3. In the process it recovered the loss of the previous day. Nifty has bounced up after a day of losses. Advance decline ratio has expanded to much above 1:1. Now 17351 could be a crucial support to track while 17613 continues to the resistance.

Daily Technical View on Nifty

Market: Observation

* Markets bounced back on Thursday after the correction seen on Wednesday. The Nifty finally gained 121.2 points or 0.7% to close at 17,536.25. Broad market indices like the BSE Small Cap index gained more, thereby out performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: 60 min chart indicates pullback likely

* Zooming into the 60 minute chart, we can see that the Nifty opened on a shaky note and after an initial minor sell off proceeded to move higher for the rest of the day.

* The short term trend is on the verge of turning up as the Nifty has now made a higher bottom on the 60 min charts after making lower tops and lower bottoms over the previous 7 trading sessions. The current short term downtrend would reverse if the Nifty crosses the previous swing highs of 17601. In this scenario, Nifty could attempt to test the 50 day SMA currently at 17859.

Nifty: Daily chart indicates downtrend intact

* On the daily chart, we can see that the Nifty remains in a downtrend despite the bounce back seen on Thursday. The 20 day SMA is also now below the 50 day SMA, indicating a moving average crossover. Weekly momentum readings like the 14-week RSI are in decline mode.

* While we remain open to pullback rallies, we expect the Nifty to eventually move lower in the coming sessions. A larger correction is likely once the 17216 supports are broken.

Nifty – Daily Timeframe chart

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