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Indian markets could open mildly higher, in line with largely positive Asian markets today and despite flat US markets on Tuesday- HDFC Securities

Major U.S. stock benchmarks finished flat to slightly lower Tuesday, a day after the S&P 500 index and Nasdaq Composite closed at records, as investors sifted through a torrent of corporate earnings reports. Corporate results for the first quarter were in the spotlight as one of the busiest weeks of the earnings reporting season got under way. But the strong results have not spurred big gains in equities as investors had largely priced in the rapid growth in profits.

Electric-car maker Tesla Inc dropped 4.5% after its quarterly results late on Monday fell short of some investors' expectations, with its revenue beat largely supported by sales of environmental credits and selling bitcoin, rather than vehicle sales. In extended trade on Tuesday, Microsoft Corp fell nearly 4% following its quarterly report, while Google-parent Alphabet jumped 5% following its report.

In U.S economic data, the Case-Shiller 20-city home price index jumped 11.9% in February from a year ago, the biggest increase in 15 years. The Conference Board said its index of consumer confidence climbed to a 14-month high of 121.7 in April from a revised 109 in March

The US Federal Reserve on Tuesday started its two-day policy meeting at which Fed Chairman Jerome Powell is expected to maintain his stance that interest rates won’t begin to rise until inflation exceeds the Fed’s 2% target. Investors don’t expect the central bank to offer more substance on future plans to taper asset purchases, and to underline that the recovery still was in its early stages.

As per an economist at Nomura, India is clearly going to see a sequential growth hit in its first quarter. Gross domestic product will shrink around 1.5% in the current quarter, which ends in June and there is downside risk to this estimate. An economist at DBS, similarly expects a contraction from last quarter, but “quite buoyant” numbers compared with last year.

Asian stocks opened on a cautious note Wednesday as investors considered a renewed rise in Treasury yields, a jump in commodity prices and a raft of earnings from U.S. technology heavyweights. A market gauge of inflation expectations over the next decade hit an eight-year high amid the rally in commodities. Japan’s retail sales rose 5.2% in March as compared with a year ago, the fastest in five months. That was higher than a median market forecast for a 4.7% gain, according to Reuter

Indian benchmark equity indices ended higher for the second day in a row on April 27. At close the Nifty was up 168 points or 1.16% at 14653. Optimism that the U.S. decision to offer vaccine support will aid the nation’s effort to control the world’s largest surge in coronavirus infections helped sentiments.

Nifty filled the downgap made on April 19 and closed above it, thus nullifying the bearishness arising out of that gap. 14697 is the next resistance, which does not seem difficult to breach. However 14785 being another downgap resistance (made on April 12) could be a tough resistance on the way up. On falls 14557 could offer support.

Daily Technical View on Nifty

Observation:

After showing intraday weakness from the highs in the last couple of sessions, Nifty witnessed sharp upmove on Tuesday and closed the day higher by 168 points.

After opening on a positive note, Nifty continued its sustainable upmove for the whole session. Minor intraday dips have been used as buy on dips opportunity for the day.

A long bull candle was formed, which signal an emergence of strong buying in the market. After showing higher levels weakness at the immediate hurdles for few occasions, Nifty finally showed initial sign of strength today by closing above the hurdle of previous opening downside gap around 14600 levels (19th April). This is positive indication and signal more upside in the near term.

The display of strength on Tuesday (by closing above the immediate resistance) and also a false downside breakout of the lower range at 14200 levels (22nd April) could signal that the market is ready to move up further and test the upper range of 14900 and higher in the near term.

Nifty on the weekly chart, sustained above the weekly 20 EMA around 14200 and bounced up in this week so far. The formation of three doji type candle patterns on the way down in the last three weeks could signal a possibility of sharp upside bounce ahead

Conclusion: The bearish pattern of sell on rise seems to have negated by the sustainable upside bounce, that has started from the lower range of 14200 levels. This is positive indication and one may expect Nifty to test the upper range of 14900- 15000 levels in the next one week. Any intra-week dips down to the support of 14500- 14400 levels could be a buying opportunity.

Nifty – Daily Timeframe chart

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