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Indian markets could open higher in line with positive Asian markets today and higher US markets on Monday - HDFC Securities

U.S. stock benchmarks finished higher Monday, as consumer spending during the holidays and gains in technology and energy shares helped to push the S&P 500 to records. Equity indexes booked gains even as travelrelated names slumped after surging COVID-19 cases triggered hundreds of U.S. flights to be scrapped over the holiday weekend.

While travel was a mess, the retail side of the economy appeared to be holding up, with Mastercard Spending Pulse reporting that holiday sales rose 8.5% against a year earlier, the biggest annual gain in 17 years. India’s exports rose by 36.2 per cent to $23.82 billion during December 1-21 this year YoY and up 27.7% compared to same period in 2019-20, according to preliminary data of the commerce ministry. Exports, excluding petroleum, have increased by 28.08 per cent during the period under review.

Most Asian stocks rose Tuesday after another all-time high for U.S. shares on optimism that the global recovery can weather risks from the coronavirus and tightening monetary policy.

Nifty erased morning losses and came into positive territory post noon on Dec 27. At close Nifty was up 0.49% or 82.5 points at 17086.2. Nifty rose after a down day on the previous session. Advance decline ratio is positive. Volumes in the markets remain very low. 17156-17004 remains the band for the near term for the Nifty and breach either side could see momentum accelerating on that side. However in low volumes sharp moves on either side seem unlikely.

Daily Technical View on Nifty

Observations

* On 27th December, Nifty recovered 279 points from the day’s low of 16833.

* Nifty managed to close at the highest level since 16th December 2021.

* However, Volumes have gone down on the exchange due to low activity from the FIIs.

* On 27th December 2021, NSE Cash Turnover stood at the lowest since 3 Apr 2020.

* From the recent swing low of 16410, Nifty has managed to recover more than 4.5%.

* Nifty is still in continuation of a downtrend with lower tops and lower bottoms on daily charts.

* Previous swing on the daily chart was seen from 17640(Top of 13 Dec 2021) to 16410(Bottom of 20 Dec 2021).

* If we were to consider this downswing and apply 61.8% Fibonacci retracement then that level comes in at 17170.

* If Nifty manages to surpass 17170 on closing basis then it would be the first indication of bullish trend reversal.

* Unless we see nifty sustaining above 17200, trend would remain down for Nifty.

* Strong support for BankNifty is seen at 34000 odd levels. Resistances for BankNifty are seen at 35800 and 36220.

Nifty – Daily Timeframe chart

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