Stock Market Outlook August 20: Sensex, Nifty May Extend Gains for Fifth Day as Market Sentiment Stays Bullish

As markets prepare for the trading session on August 20, all eyes will be on whether the Nifty can breach the 25,000 psychological mark and maintain momentum toward 25,250. Similarly, sustained consolidation in Bank Nifty with a bias toward the upside could support overall market sentiment.

Stock Market Outlook August 20

Indian stock markets closed in the green for the fourth consecutive day on August 19. Amid strong signals from the global market, the market witnessed buying all around. At the end of trading, the Sensex closed at 81,644.39, up 370.64 points or 0.46%. At the same time, the Nifty rose 103.70 points or 0.42 per cent to reach 24,980.65.

Sensex, Nifty Prediction Today

The Nifty index began the session on a flat note on last trading session but gradually picked up momentum as the day progressed. It touched an intraday high of 25,012 in mid-session before entering into a consolidation phase. Ultimately, the index closed just below the key 25,000 mark. The Sensex, too, followed a steady upward trajectory throughout the session, reflecting sustained buying interest.

Sector-wise, the performance was broadly positive. Barring the pharma sector, all other major sectoral indices ended in the green. Notably, telecom, FMCG, media, auto, and oil & gas sectors led the rally with gains ranging between 1% and 2%. In the broader markets, the Nifty Midcap 100 index rose by 0.97%, while the Nifty Smallcap 100 index advanced 0.7%, indicating strong participation across the board.

Nifty Forms Bullish Pattern: Here's What Happens If It Crosses 24,852

From a technical standpoint, the Nifty formed a bullish candlestick pattern, which was contained within the previous session's price range. This suggests a phase of consolidation, albeit with a positive bias. The index continues to trade above both the 20-day and 50-day exponential moving averages (EMAs), reinforcing the strength of the ongoing uptrend.

Looking ahead, if the Nifty manages to sustain above Monday's gap area of 24,631-24,852, the bullish momentum is expected to continue. This could potentially open the doors for the index to move toward the 25,250 level in the coming sessions.

On the downside, immediate support is seen around the 24,500-24,600 zone. A stronger support level lies in the 24,000-24,200 range, which coincides with the 200-day EMA and an ascending trendline drawn from the February and March 2025 swing highs. This confluence makes it a crucial demand zone in the near term.

"The index formed a bullish candlestick pattern which remained enclosed inside previous session price range signaling consolidation with positive bias while holding above the 20- & 50-days EMA. Going ahead, index sustaining above Monday's gap area ( 24631-24852) will keep the bias positive and will gradually open upside towards 25,250 levels in the coming sessions," Bajaj Broking Research stated.

Bank Nifty Outlook for August 20

Bank Nifty also displayed a positive undertone by forming a bullish candlestick pattern, although its range was largely contained within the previous session's price action. The index continues to find buying interest emerging from its 100-day EMA, which has acted as a strong support zone in recent sessions.

Going forward, the Bank Nifty is likely to continue consolidating within the 54,800-56,300 range. Only a decisive move beyond this band will indicate the next major directional trend. On the downside, the 54,800-55,000 region is key, supported by the 100-day EMA and important Fibonacci retracement levels from the prior upward move.

A break below 54,800 could trigger a decline toward 54,000 as per the Bajaj Brokerage report. On the upside, resistance is expected around the 56,000-56,300 range. This corresponds to the recent breakout zone and also aligns with the 50% retracement level of the decline from 57,628 to 54,905.

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