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Indian markets could open flat to mildly higher following mixed Asian markets today, and despite gains in the Nasdaq Composite index in US markets on Thursday - HDFC Securities

The S&P 500 index booked its first closing record in seven weeks on Thursday, as investors digested a parade of earnings reports and monitored a potential setback in White House efforts to raise the corporate tax rate. A good start to third-quarter earnings season has helped investors put the nervousness of September behind them, even as concerns over inflation, COVID-19 and China’s economy still linger. Of the approximately 70 S&P 500 companies that have reported results so far, 86% posted earnings that topped analysts expectations, according to Refinitiv.

The U.S. economy still is growing at a solid pace, the Federal Reserve’s Beige Book noted Wednesday, but labor shortages and supply-chain bottlenecks are restraining growth and triggering higher inflation. China's thermal coal futures fell by their trading limit for the third evening session in a row on Thursday, extending losses triggered by signs Beijing may intervene to cool surging prices and ease a widespread power crunch.

Asian stocks were steady Friday, bolstered by reports indicating that indebted developer China Evergrande Group may meet a key payment deadline. Asian stocks were steady Friday as traders weighed earnings reports and a looming payment deadline for China Evergrande Group.

Nifty fell for the third straight session on October 21 though it recovered a large part of early losses by the end. At close, Nifty was down 0.28% or 51.4 points to 18215.2.

Nifty has fallen for the third day; however the volumes are falling and advance decline ratio is improving, though below 1:1. This could mean that the recent selloff or weakness is nearing the end. 18266-18350 could be the next resistance for the Nifty while 18030 could be a support in the near term.

Daily Technical View on Nifty

Stage is set for bulls comeback..

Observation: The weakness continued in the Nifty for the third consecutive sessions on Thursday and the market witnessed volatility and closed the day lower by 88 points. The convincing upside recovery was seen in the later part of the session. A long negative candle was formed with lower shadow, which indicate an emergence of buying interest from the lows. This also signal a possible completion of recent downward correction in the market. The positive pattern of higher tops and bottoms as per daily chart is intact. After the formation of new higher top at the all time high of 18604 on 19th Oct, the Thursday's swing low of 18048 could now be considered as a new higher bottom of the sequence. We need up close in the subsequent session to call this as a higher bottom reversal.

The crucial lower support of 10 day EMA has been sustained after an intraday violation below it at 18160. As happened in the past, there is a higher possibility of an upside bounce from this support in the short term.

Conclusion: The short term weakness of the market seems to be ending now. Positive close in the next session could confirm higher bottom formation at Thursday's low of 18048. A sustainable upmove from here could eventually challenge the recent all time high of 18604 levels in the near term. Immediate support is placed around 18150-18050 levels.

Nifty – Daily Timeframe chart

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