Nifty 50 and Sensex Outlook: What to Anticipate from the Indian Stock Market on August 19

Indian stock market indices, the Sensex and Nifty 50, are expected to open higher on Monday, following gains in global markets and positive investor sentiments. The trends on Gift Nifty also point to a positive start for the Indian benchmark index. The Gift Nifty was trading at around 24,670, nearly 72 points higher than the Nifty futures' previous close.

On Friday, the domestic equity indices finished nearly 2% higher, with the Nifty 50 reclaiming the 24,500 mark. The Sensex rose 1,330.96 points, or 1.68%, to close at 80,436.84, while the Nifty 50 gained 397.40 points, or 1.65%, to 24,541.15. The Nifty 50 formed a long bull candle on the daily chart with a lower shadow.

“Technically, this pattern indicates an attempt at an upside breakout of the consolidation movement around 24,400 levels. Nifty has now moved towards the hurdle area of the previous huge opening downside gap of 5th August, and the said down gap is expected to be filled soon around 24,700 levels,” according to experts.

Shetti, Senior Technical Research Analyst at HDFC Securities, said the recent downside breakout appears to have been a false breakout, which resulted in a sharp upside bounce on Friday. According to him, the next upside to watch is around 24,700 to 25,000 in the near term.

On August 16, the Nifty 50 saw a decisive upside breakout and closed the day 397 points higher than the 24,500 level.

"The Nifty 50 rallied above 24,500 after days of consolidation within a 400–500-point range. In the near term, the Nifty may continue to consolidate in the 24,300-24,550 range. Only a decisive move above 24,550 could result in a directional upmove in the index," said Rupak De, Senior Technical Analyst at LKP Securities.

“The benchmark index Nifty’s RSI readings of 55 on the daily, 69 on the weekly, and 77 on the monthly timeframe suggest it is trading in an overvalued territory at higher frames. In this situation, traders and investors should be mindful when selecting stocks for short-term trading. I suggest they pick stocks consolidating at or below their sector valuations, as they could yield better returns,’’ quoted VLA Ambala, Co-Founder of Stock Market Today.

Vaishali Parekh, Vice President - Technical Research, PL Capital - Prabhudas Lilladher, stated that the Bank Nifty experienced a strong pullback from the important 100-period MA level of 49,700 to improve the bias, and with sentiment improving, can expect further rise once the resistance barrier of 50,800 is convincingly breached above, with higher targets of 52,000 and 53,400 levels in the coming days. According to her, the weekly range for the Bank Nifty would be 49,500 to 51,800.