Trade Setup For Sensex, Nifty On August 23; Jerome Powell's Speech In Jackson Hole To Set Market Tone

Indian stock market is likely to witness a flat opening on Friday, as Gift Nifty traded in a lacklustre session. Also, Asian shares traded lower with the exception of Japanese equities. The US market lost gaining steam overnight, dragged by tech shares. Investors will watch Federal Reserve chair Jerome Powell's speech at the Jackson Hole Economic Symposium later in the day.

In the previous session, the domestic equities extended their winning streak to six consecutive sessions on Thursday, August 22, driven by a mix of global cues and rising expectations that the US Federal Reserve might soon pivot towards a more accommodative monetary policy.

On August 22, the Sensex climbed 130 points to close at 81,035, while the Nifty 50 index added 41 points to finish at 24,812. The Nifty Bank index surged by 300 points, ending the day at 50,986. Meanwhile, the Midcap Index outperformed broader markets with gains of 401 points, closing at 58,845.

For Friday, August 23 trade, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, all eyes will be on US Fed Chair Powell's speech at the Jackson Hole Symposium. Investors would look for hints on interest rate cuts. Hopes are running high for a rate cut in the September meeting followed by more cuts in subsequent meets. The market thus is likely to consolidate in the near term. At the same time, sectorial rotation and stock-specific action will be at play.

Meanwhile, Ajit Mishra - SVP, of Research, Religare Broking said, markets are closely monitoring global indices for direction, and the recent pause in US markets ahead of the Jackson Hole Symposium is leading to some caution locally also. Technically, there are signs of consolidation in the Nifty after it failed to break the resistance at 24,850 level. Despite this, we maintain a bullish outlook on the markets and recommend focusing on selective stock picking.

Shrikant Chouhan, Head Equity Research, Kotak Securities added "We are of the view that, the short-term market texture is still on the positive side but due to temporary overbought conditions we could see range bound activity in the near future. For the traders now, buying on dips and sell on rallies would be the ideal strategy. 24750-24700/80800-80650 would be the key supports zone while 24900-24950/81400-81600 could act as key resistance areas for the day traders. However, below 24700/80650 the sentiment could change. Below the same, traders may prefer to exit out from the trading long positions."

Here are the technical forecast for key benchmarks on August 23 by Prabhudas Lilladher:

Nifty50: Nifty continues to gain strength steadily and gradually reaching the 24800 zone with bias and sentiment maintained strong as mentioned earlier and is anticipated to aim for the target of 25000 zone in the coming days. The broader markets is also gaining strength to support the benchmark index and further rise is expected maintaining a bullish trend.

Sensex: Sensex has almost retraced 78.6% from the recent fall and managed to close above 81000. The bias is maintained very strongly and can carry on with the positive move till the end of the end of the month, expecting next targets of the 81700 level in the coming days, with major support maintained near the 20 DMA level at the 80300 zone as of now. The support for the day is seen at 80600/24700 levels while the resistance is seen at 81700/25000 levels.

Bank Nifty: BankNifty ended on a positive note find resistance near the 51000 zone and as mentioned earlier, would need a decisive breach above the barrier of 51000 levels to trigger for fresh upward move with next targets of 52600 and 53500 levels visible in the coming days.

BANKEX: Bankex has gained strength and closed above the 20 DMA and 50 EMA levels, and it has targets of 58500 and 59000 in the coming days. The index with the bias turned strong and was expected to rise further; it would have the 56500 zone as the crucial support from current levels. BankNifty would have the daily range of 50600-51500 levels, with Bankex support at 57500 and resistance at 58500 levels.

Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher recommended buying three stocks on Friday. These are:

- BUY NHPC cmp 98 Stop Loss 96 Target 104

- BUY BHARAT FORGE cmp 1621 Stop Loss 1584 Target 1695

- BUY GODREJ CONSUMER cmp 1440 Stop Loss 1410 Target 1510

Also, on Friday, Adani stocks will be in focus as the conglomerate is reportedly looking to sell Rs 30,000 crore worth shares in its companies. Other stocks in focus would be Nykaa, Bharti Airtel, Wipro, and Dabur among others.