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Indian markets could open flat to mildly higher following mixed Asian markets today, and mildly higher US markets on Tuesday - HDFC Securities

U.S. stock indexes ended at fresh peaks Tuesday, with all three major benchmarks notching all-time highs for a third straight trading session for the first time since December 2019. Stocks extended their winning streak amid betterthan-expected earnings reports ahead of a Federal Reserve policy statement Wednesday that is likely to bring confirmation of a start to a reduction in its bond purchases. Third-quarter corporate earnings have held up despite supply chain disruptions, rising commodity prices and uncertainty about economic growth in the final three months of this year.

The economically sensitive Dow Jones Transportation Average soared 6.9% to hit an all-time high, lifted by a 108% surge in shares of Avis Budget after the car-rental firm reported earnings. Australia abandoned its yield curve control policy but signaled it was unlikely to raise interest rates any time soon. Investors have also priced in a 15-basis point hike from the Bank of England on Thursday as policy makers face a surge in inflation.

A private survey released Wednesday showed growing Chinese services activity in October, with the Caixin/Markit services Purchasing Managers’ Index coming in at 53.8, rising from September’s reading of 53.4. Asian stocks were steady Wednesday as traders mulled another all-time high for U.S. equities and a retreat in short-term sovereign yields ahead of the Federal Reserve policy decision.

Nifty ended lower on Nov 02 reversing part of the gains made on the previous day. At close, Nifty was down 0.23% or 40.7 points at 17888.9. Nifty lost some steam on Nov 02 after the rise seen on Nov 01.Advance decline ratio remains positive as the broader markets keeps drawing trader/investor interest. FPI activity seemed muted compared to that seen in the last few days. 18033-18098 is the next band of resistance while 17833 is the support.

Daily Technical View on Nifty

Market: Observation

* Markets ended lower on Tuesday after the sharp bounce back seen on Monday. The Nifty finally lost 40.7 points or 0.23% to close at 17,888.95.

* Broad market indices like the BSE Mid Cap and Small Cap indices ended higher, thereby out performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: 15 min charts remain positive

* Zooming into the 15 minute chart, we can see that the Nifty opened on a positive note and gradually drifted lower through the day to close near the lows of the day.

* The MA crossover on the 15 min charts which happened on Monday however remains intact which is a positive sign for the bulls. The index is now resting on the 50 period MA and upside momentum is likely to pick up once the Nifty crosses the 20 period MA.

Nifty: 50 day SMA providing support

* On the daily chart, while the Nifty has bounced back strongly on Monday and is holding above the 50 day SMA, it is now finding resistance at the 20 day SMA which is currently at 18050. Upside acceleration is likely once these 18050 levels are taken out convincingly.

* In this scenario, the Nifty could attempt to test the previous highs of 18384. Crucial supports are now at 17805-17697.

Nifty – Daily Timeframe chart

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