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Indian markets could open lower, in line with negative Asian markets today and negative US markets on Tuesday..… -  HDFC Securities

Major U.S. stock benchmarks closed lower Tuesday as enthusiasm centered on a strong round of earnings from major retailers, including Dow components Home Depot Inc. and Walmart Inc., appeared to wane amid inflation concerns. Upbeat corporate results and expectations for a booming economic expansion in the wake of the COVID-19 pandemic competed with worries about lofty valuations and signs of accelerating inflationary pressures. Investors were anxious ahead of Wednesday's release of minutes from the Federal Reserve's April policy meeting

US Housing starts tumbled 9.5% to a seasonally adjusted annual rate of 1.569 million units last month, the Commerce Department said on Tuesday. Economists polled by Dow Jones had forecast starts falling to a rate of 1.7 million units in April.

Fund managers recently trimmed their overweight positions on technology stocks to a three-year low as inflation worries left growth stocks vulnerable to a pullback, and turned overweight on UK stocks for the first time in seven years, a survey from Bank of America showed.

China has banned financial institutions and payment companies from providing services related to cryptocurrency transactions, and warned investors against speculative crypto trading. Under the ban, such institutions, including banks and online payments channels, must not offer clients any service involving cryptocurrency, such as registration, trading, clearing and settlement. Bitcoin fell as much as 2.3% to $42,309 in early Asian trading Wednesday.

Indian equity benchmark indices rose for a second day on May 18, tracking most Asian peers and closed at a two month high. At close, Nifty 50 Index added 1.24% or 185 points to close at 15108.

Daily Technical View on Nifty

Observation: Carrying on from the previous session, markets rallied further on Tuesday to close with gains for the second consecutive session. The Nifty finally gained 184.95 points or 1.24% to close at 15,108.1. 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 Auto, CD, Capital Goods and Power indices. The top losers were the BSE Telecom and FMCG indices.

Zooming into the 15 minute chart, we can see that the Nifty opened with a strong upgap and then traded in a range for the rest of the trading session. In the process, the index took out the previous swing highs of 15044 and remains in a short term uptrend.

On the daily chart, the Nifty continues to hold above a rising trend line that has held the important lows of the last few months. This implies that the index remains in an intermediate uptrend. The Nifty has also recently made higher bottoms at 14416 and 14591 and continues to trade above the 20 and 50 day SMA, which gives further evidence of an uptrend.

Conclusion: The 1-2 day trend of the Nifty is now up with the index breaking above the previous swing high of 15044.

On the larger daily timeframe, an upward sloping trend line continues to support the index with the Nifty also making higher bottoms at 14416 and 14591 and continuing to trade above the 20 and 50 day SMA, which gives further evidence of an uptrend.

The breakout above the recent swing high of 15044 indicates that the Nifty looks set to move higher towards the lifetime highs of 15432.

Our bullish bets are off if the Nifty moves below the lows of 14826.

Nifty – Daily Timeframe chart

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