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Indian markets could open flat following rangebound Asian markets today and negative US markets on Wednesday - HDFC Securities

U.S. stocks finished lower Wednesday, but remain within striking distance of record closing highs, aided by gains in large-cap information technology shares, including Tesla Inc. and Apple Inc. which were finding bids. Nagging concerns about inflation and the economic recovery from COVID-19 have held markets in check, but a lack of alternatives and hope that consumers can continue to serve as a pillar of the economic rebound are supporting gains and a fitful rotation into sectors of the market.

U.S. crude prices retreated to below $80 a barrel, pressured by Biden’s efforts to ease prices at the pump, including reports that the U.S. and Chinese leader Xi Jinping discussed a joint release of crude supplies, in a virtual meeting. Gold prices edged up on Thursday, as the dollar eased and U.S. bond yields retreated from a threeweek high, lifting bullion's appeal.

Citing faster-than-expected recovery, rising consumer confidence and the resultant spending spike, Swiss brokerage UBS Securities has revised upwards its India growth forecast for the current fiscal to 9.5 per cent from 8.9 per cent in September. Asian stocks were mixed Thursday as traders weighed risks to the global economic recovery from the prospect of faster monetary-policy tightening to tackle inflation.

Nifty fell for the second consecutive session on Nov 17 dragged down by mixed Asian markets. At close Nifty was down 0.56% or 100.5 points to 17898.6. Nifty has breached the short term up trend line, indicating some more near term weakness. 17999 is the resistance now for the Nifty while 17697-17757 is the support band. Volumes and advance decline ratio continue to disappoint.

Daily Technical View on Nifty

Market: Observation

Markets corrected sharply on Wednesday after a weak opening. The Nifty finally lost 100.55 points or 0.56% to close at 17,898.65. Broad market indices like the BSE Small Cap index ended higher, thereby out performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: 15 min charts indicates consolidation

* Zooming into the 15 minute chart, we can see that though the Nifty recovered during the morning session after a weak opening, selling once again emerged in the late afternoon and led to the Nifty closing sharply in the red.

* On the 15 min chart, we observe that Nifty is now in a short term downtrend as evidenced by lower tops and lower bottoms made over the last 3 sessions. The 20 period MA also continues to trade below the 50 period MA, which is again a negative signal for very near term.

Nifty: 50 day SMA under threat

On the daily chart, we can see that the Nifty has corrected further and is just above the 50 day SMA. With large caps like Reliance and Tata Steel looking weak on the daily charts, there is a good chance that Nifty could move below the 50 day SMA at 17842 and test the next major supports of 17820-17798 in the very near term. Any pullback rallies could find resistance at 17976. A larger correction towards the 17613 levels is likely if the 17820-17798 supports are broken.

Nifty – Daily Timeframe chart

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