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Indian markets could open lower in line with mixed Asian markets today and mixed US markets on Tuesday - HDFC Securities

The Dow Jones Industrial Average ended at a fresh peak Tuesday, scoring back-to-back record closes in the first week of 2022, even as the broader market fell under pressure amid newfound selling in government debt that was driving long-term yields higher and interest-ratesensitive tech shares lower. The S&P 500’s information technology sector finished 1.1% lower Tuesday, while the index’s financials sector rose 2.6%.The yield on the 10-year Treasury note rose 3.8 basis points to 1.666%, the highest since Oct. 21.

Americans quitting their jobs rose by 370,000 to a record 4.5 million in November. Job openings fell by 529,000 to 10.6 million on the last day of November. The Institute for Supply Management said its US December manufacturing index dropped to an 11-month low of 58.7% compared with 61.1% in November.

The global supply chain pressures blamed for disrupting the flow of goods and sparking high inflation may have finally peaked, according to a new gauge from the New York Federal Reserve. Stocks in Asia were mixed Wednesday as investors fret about interest rate increases that dragged down U.S. stocks from a record and as technology stocks in the region came under pressure.

Nifty ended higher for the third consecutive session on Jan 04 even as traders started returning from holidays. At close Nifty was up 1.02% or 179.6 points at 17805.3. Nifty has shown great strength in its recent upmove. Even with traders beginning to return, the upward momentum has not eased. Now Nifty could face resistance in the 17868-17918 band while 17640 could offer support.

Daily Technical View on Nifty

Display of strong upside momentum..

Observation: The sharp upside momentum continued in the market for the second consecutive sessions on Tuesday and Nifty closed the day with another promising gains of 179 points.

Another long bull candle was formed on the daily chart, which is back to back for the two sessions. This is a display of an emergence of strong upside momentum in the Nifty post upside breakout of the hurdle of down sloping trend line recently at 17250 levels. This is positive indication and signal more upside for the short term.

The market has witnessed strength in the upside momentum recently, which was absent in the last couple of months. The crucial resistances have started to break on the upside one after another which signal an excellent shift in the momentum towards upside.

The negative chart pattern of lower tops and bottoms of daily chart has been negated on Tuesday and this action signal that the upside bounce from the lows of 16410 levels is likely to be a new trended upmove rather than pull back rally of a down trend. Hence, any dips from here could open bullish sequence of higher tops and bottoms on the daily chart.

Conclusion: The near term trend of Nifty is sharply up and this upside momentum is likely to continue for the short term. The next upside target to be watched at 18200 levels and this could be achieved in the next one week. Immediate support is placed at 17650 levels.

Nifty – Daily Timeframe chart

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