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Indian markets could open higher in line with positive US markets on Tuesday. Most Asian markets are shut today due to Lunar year holidays -   HDFC Securities

Global equity markets wavered on Tuesday as a new month saw investors weigh strong earnings from big-name U.S. companies against mixed economic data and inflation worries. All three major US benchmarks ended higher Tuesday, booking a third straight day of gains after wobbling earlier in the session, as Wall Street closed out February’s first day of trade on a positive note following a rough January. US investors weighed manufacturing and jobs data, while earnings from Exxon Mobil Corp. and other corporate heavyweights were in the spotlight.

In economic data, the Labor Department said job openings in the US rose by 150,000 to 10.9 million on the last day of December, indicating the labor market remains tight. Economists surveyed by The Wall Street Journal had forecast a 10.5 million figure. The closely followed Institute for Supply Management barometer of manufacturing activity slipped to a 14-month low of 57.6% in January as a torrent of omicron cases hit the U.S. economy and shortages of labor and supplies hindered production. Investors, however, were more focused on the survey’s index of prices paid, which rose to 76.1% from 68.2% in December, triggering some renewed selling that took stocks to session lows.

India unveiled on Tuesday a bigger budget of 39.45 trillion rupee ($529.7 billion) for the coming fiscal year, stepping up investment on highways and affordable housing to put growth on a firmer footing as the economy recovers from the pandemic. Asian stocks rose Wednesday amid a recovery in U.S. shares spurred by the corporate earnings outlook and signs that Federal Reserve officials favor measured monetary-policy tightening. Markets in mainland China, Hong Kong, Singapore and South Korea are closed on Wednesday for the Lunar New Year holidays.

Nifty ended the Budget day (Feb 01) in the positive for the second consecutive session after a volatile trade. At close Nifty was up 1.37% or 237 points to 17576.9. Nifty ended in the positive boosted by growth inducing measures of the Union Budget. Advance decline ratio also remained positive. Markets are enthused by the credible conservative estimates in the Budget. However high inflation and interest rates remain the two spoilsports. 17745-17805 could be the next resistance for the Nifty while 17374-17410 could be the support.

Daily Technical View on Nifty

Display of high volatility on Union Budget day..

Observation: The sharp upside momentum continued in the market around the key economic event of Union Budget 22 on Tuesday, as Nifty displayed high volatility and finally closed the day higher by 237 points. A small positive candle was formed on the daily chart with long lower shadow. Technically this pattern indicate high volatility in the market with positive bias. Formation of long lower shadow on the daily chart signal a sharp upside recovery in the market from the lows. This is positive indication and one may expect further upside in the market The recent decline in Nifty as per weekly chart indicate a faster retracement on the downside. Hence, present upmove could be considered to be a pullback rally. Hence, one may expect a formation of lower top around 17900-18000 levels, before showing another round of weakness from the highs. The revisit of up sloping trend line can’t be ruled out around 16800 levels in coming months.

Conclusion: The short term trend of Nifty is positive and the upside momentum is expected to continue for the next 1 or 2 weeks and one may expect upper levels of 17900-18000 to be reached. The overall long term charts indicate a chances of Nifty forming lower top reversal around 18K mark before showing another round of weakness from the highs.

Nifty – Daily Timeframe chart

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