Stock Market Prediction for Wednesday, August 19: The equity benchmark indices are likely to open on a cautious note on Wednesday, August 19, after extending their corrective phase in the previous session on Tuesday as crude oil prices rose above $90 a barrel, fading hopes of a diplomatic breakthrough in West Asia, and a weak rupee weighed heavily on investors’ sentiment.
The 30-share BSE Sensex was down 492.70 points, or 0.63 per cent, to settle at 77,235.46, registering its third day of decline. The 50-share NSE Nifty declined for the sixth day, sliding 132.75 points, or 0.55 per cent, to end at 24,154.90.
Stock Market Prediction for Wednesday, August 19
For Wednesday, technical analysts expect the indices to remain under pressure, with the Nifty likely to remain in 24,000-23,800 zone while Sensex’s 76,800-77,000 range emerges as crucial support levels.
Bajaj Broking Research stated the Nifty formed a bearish candlestick pattern on Tuesday, which maintained lower high and a lower low highlighting continuation of the corrective bias. The index in the process closed below the 50 days EMA.
Nifty is forming lower high and lower low in the last 8 sessions, index need to break the sequence and start forming higher high and higher low in the daily chart to signal pause in the current corrective trend, he said.
Overall, the index is expected to extend the recent consolidation and trade in the broad range of 24,000-24,600 in the coming sessions, the brokerage added.
“Indian benchmark indices opened on a weak note and remained under pressure throughout the session, ending below the crucial 24,200 mark. Rising geopolitical tensions and Brent crude oil prices trading above the $90 per barrel level continued to weigh on investor sentiment. The session also remained volatile and choppy amid the weekly Nifty expiry, while persistent weakness in the Indian rupee against the US dollar added to the pressure on domestic equities,” the brokerage said.
Index in the last 11 sessions is seen consolidating in a range with a corrective bias, while retracing 50 per cent of its previous 7 sessions sharp up move from 23,606 to 24,774. A shallow retracement of its previous up move highlights a higher base formation, it stated.
Nifty has short-term support placed at 24,000-23,800 levels being the confluence of the trendline support joining last 4 months lows, previous major gap area and 61.8% retracement of previous up move 23,606 to 24,774, the brokerage added.
Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities, said the Nifty remains below its 200-DEMA at 24,384, keeping the broader near-term structure under pressure.
“More importantly, Nifty has now slipped below the 50 per cent Fibonacci retracement at 24,190 of the recent recovery, signaling that the previous rebound is losing its grip and the corrective trend is gaining momentum,” Dhameja stated.
The immediate focus is now on 24,130, which represents a critical make-or-break zone for the index. A sustained close below this level could trigger further unwinding towards 24,050–24,000, where the 61.8% retracement zone and psychological support are likely to come into play, he added.
“Nifty extended its corrective phase, closing at 24,154.90, down 132.75 points (-0.55%), as the index continued to display a lack of meaningful buying interest despite approaching key support levels. The session remained firmly in favour of sellers, with every intraday recovery attempt meeting supply, resulting in another weak close near the lower end of the recent range,” Dhameja stated.
Overall, Dhameja stated the technical setup remains weak below 24,190–24,384. “Unless the index quickly reclaims these levels, the probability of an extension towards 24,050–24,000 remains elevated, while 24,130 will be the immediate level to watch for confirmation of the next directional move,” he added.
For Sensex, Sachin Gupta, VP – Technical Research, Choice Equity Broking stated the index has formed a bearish candle with virtually no lower recovery on the daily chart, while the close below the 50-Day EMA marks a deterioration in the short-term structure.
“The index is now trading below all key moving averages, and the RSI at 44.82 has slipped below the neutral 50 mark, signalling weakening momentum,” he stated.
For the near term, 76,800-77,000 remains the crucial support band, while 77,600-77,800 is likely to act as the first hurdle on any recovery attempt, according to Gupta.
“Technically, the session carried a distinctly bearish undertone. The Sensex opened with a 309-point gap-down, after which selling gradually intensified from around the 77,500 level during the morning session. The second half remained cautious and volatile, but the index failed to attract meaningful buying at lower levels,” the analyst said.
The session marked a clear shift towards the lower end of the recent range, with the index unable to reclaim the 77,500 zone after opening sharply lower, he added.
“The broader setup has therefore turned more cautious, with 76,800–77,000 becoming an important line of defence. Holding this zone could encourage a technical rebound towards 77,600–77,800, whereas a decisive breakdown may extend the current corrective phase,” Gupta noted.
For now, the market favours a wait-and-watch approach, with traders likely to seek confirmation of buying strength before taking aggressive positions on the upside, he said.
(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
