Week Ahead....

The market sentiment revived in the week ended August 16 as the benchmark indices snapped a two-week losing streak due to a smart bounce back on Friday. The positive global cues with the easing US recessionary concerns, rising hope for a US fed funds rate cut in September, and stability in the Japanese yen lifted sentiment.

The BSE Sensex rallied 0.92 percent to 80,437 and the Nifty 50 climbed 0.71 percent to 24,541 during the week, while the Nifty Midcap 100 index was up 0.84 percent and Smallcap 100 index gained 0.14 percent.

All eyes next week will be on US Fed meeting minutes. Overall, we expect the market to consolidate in a broader range and take cues from global factors.

Apart from FOMC minutes and Powell's speech, the weekly jobs data and new home sales data from the US; and inflation print for July from Europe and Japan will also be watched next week. In addition, the participants will also watch the manufacturing and services PMI flash numbers for August from several key economies.

On the domestic front, the focus will be on the HSBC Manufacturing & Services PMI flash data for August scheduled on August 22. The Manufacturing PMI for July came in at 58.1, down from 58.3 in the previous month, while Services PMI in July was at 60.3, falling from 60.5 in June.

In addition, the bank loan and deposit growth for the fortnight ended August 9, as well as foreign exchange reserves for the week ended August 16 will be released on August 23.

The market participants will also keep an eye on the FII as well as DII desks, as foreign institutional investors remained net sellers in the cash segment of Indian equity markets but that outflow has fully been compensated by inflow from the domestic institutional investors who showing consistent buying interest on every dip given the no major negative on the domestic front.

Technically, the Nifty 50 is looking strong given the index turned back into momentum after several days of consolidation. With Friday's strong rally, the index climbed above all key moving averages and 50 percent Fibonacci retracement (taken from the record high to the August low). Further, it formed a bullish candlestick pattern with a long lower shadow on the daily as well as weekly charts, which is a bullish sign, while there was higher high-higher low formation on the weekly as well as daily timeframes. Hence, the index seems to be targetting 24,700 as climbing above this level can close the bearish gap of August 5 and drive the index towards the psychological 25,000 mark, however, on the downside, the support lies at 24,300-24,200.

The weekly options data indicates that 24,800-25,000 is the key hurdle zone for the Nifty 50 on the higher side, however, 24,400-24,300 is expected to be the support zone.