The Indian equity markets remained in a consolidation phase, with the Nifty 50 failing to breach the psychological resistance of 23,000, while the Bank Nifty continued to find strong support at 49,000. Meanwhile, volatility eased slightly as India VIX declined by 0.37 percent to 15.67, though it remained elevated above key moving averages, signaling caution for traders.
Nifty 50 Analysis
The Nifty 50 maintained a tight trading range on February 18, closing marginally lower by 14 points at 22,945. The index defended the 22,800 level, which has emerged as a crucial support zone, but encountered resistance near 23,000 for another session. Traders remained cautious ahead of the FOMC meeting minutes release on February 19.
To trigger a significant upward move, the Nifty must decisively clear the 23,000 barrier. A breakout above this level could open the doors to 23,200 (aligned with the 20-day EMA) and further towards 23,500 (50-day EMA). On the downside, failure to hold 22,800 may extend the consolidation, and a breach of 22,700 could invite further selling pressure.
The daily chart formed a Doji-like candlestick with a long lower shadow, suggesting indecision in the market. “Nifty took support at 22,800 and bounced back, but the short-term trend remains uncertain,” noted Shrikant Chouhan, Head of Equity Research at Kotak Securities. He emphasized that intraday traders should monitor the 22,800 support zone closely, as sustaining above this level may trigger a relief rally toward 23,100-23,200.
Derivatives Insights
Open interest data from weekly options highlights significant resistance between 23,000 and 23,200, with the highest call OI at 23,500, followed by 23,800 and 24,000 strikes. On the support side, the highest put OI is observed at 22,000, with notable interest at 22,500 and 22,700 strikes. The positioning suggests a potential range-bound movement, with 22,700 acting as a key downside level and 23,200 as immediate resistance.
Bank Nifty Analysis
The Bank Nifty gave up its previous session’s gains, closing 172 points lower at 49,087. Despite the decline, the index successfully defended the 49,000 mark for the third consecutive session, signaling strong demand at lower levels. The daily chart reflected a bearish candlestick pattern with long lower wicks, indicating buying interest on dips.
“The banking index has been resilient at lower levels. However, for a sustained bullish breakout, it must stay above the quarterly VWAP of 49,300,” remarked Anshul Jain, Head of Research at Lakshmishree Investments. He added that any dip towards 48,800–48,900 would present a buying opportunity, with immediate upside targets at 49,300. A decisive breakout above 49,300 could lead to a sharp rally towards 49,800.
Market Sentiment & Outlook
With India VIX declining slightly but still remaining at higher levels, market participants should remain cautious. The near-term trend for Nifty hinges on whether it can decisively breach 23,000, while Bank Nifty’s ability to stay above 49,000 will dictate sentiment in the financial sector.
Traders should keep a close watch on key support and resistance levels, with upcoming macroeconomic cues, including global central bank policies and domestic market trends, likely to influence market direction in the sessions ahead.