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Indian markets could open higher following positive Asian markets today and despite flat US markets on Monday

The S&P 500 and Nasdaq Composite indexes closed lower, limiting wins to two days in a row, while Dow industrials also gave up earlier gains, as investors remain focused on rising inflation and its impact on yields for government debt and borrowing costs. Monday’s modest pullback in equities came as Treasury yields jumped across the board on expectations that the Federal Reserve may have to taper its monthly bond purchases at a faster-thananticipated pace, given signs of persistent inflation. The yield on the 10-year Treasury note rose 3.8 basis points to around 1.621%, the highest in three weeks.

The New York Fed’s Empire State manufacturing business conditions index rose 11.1 points to 30.9 in November. Economists had expected a reading of 22. The dollar index, which measures the currency against six peers, hit 95.420 on Monday, its highest since July 2020, and was last up 0.3%.

India trade deficit fell marginally in October as exports rose and imports eased. Trade deficit stood at $19.73 billion, compared to $22.59 billion in September. In September, the monthly deficit was at an all-time high. Exports rose 5.5% month-on-month to $35.65 billion in October. On an annual basis, it increased 43.1%. Imports fell 1.8% sequentially to $55.37 billion. It increased 62.5% over the preceding year.

Asian stocks were steady Tuesday as traders weighed inflation risks and monitored the first face-to-face virtual summit between U.S. President Joe Biden and Chinese leader Xi Jinping. Australia’s central bank is expected to keep the interest rate steady until 2024, according to minutes from its November monetary policy meeting released Tuesday.

Nifty closed almost flat on November 15 after a higher opening. At close Nifty closed 6.7 points or 0.04% higher at 18109.45. Nifty closed flat on Nov 15 making a doji after an uprun. Advance decline ratio was in the negative reflecting profit taking across small and midcaps. The Nifty is finding it difficult to build on the gains. Institutional flows and volumes need to grow to bring a follow through rise. 18210 could be a resistance in the near term, while 17978 is a support.

Daily Technical View on Nifty

Market: Observation

* Markets ended with marginal gains on Monday after the strong bounce back seen on Friday. The Nifty finally gained 6.7 points or 0.04% to close at 18,109.45.

* Broad market indices like the BSE Mid Cap index gained more, 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 the Nifty opened with an up gap and witnessed selling from the highs to finally close with marginal gains.

* The 15 min chart indicates that the Nifty is now consolidating below its recent swing highs of 18210. Given that the 20 period MA is now sloping down, there is a good probability that Nifty could continue to consolidate in a narrow range for the very near term. On the downside, crucial supports are now at 18061.

Nifty: Trading just above the 20 day SMA

* On the daily chart, we can see that the Nifty has recently moved above the 20 day SMA after witnessing a strong bounce back recently from the 50 day SMA. The 14 day RSI has also made a higher bottom which indicates that momentum is picking up.

* Uptrend is likely to accelerate once the immediate highs of 18210 are taken out.

Nifty – Daily Timeframe chart

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