Trade Setup for Feb 20: Nifty slips below key averages; 25,400 in focus, 25,100 at risk
Nifty falls sharply below key moving averages amid global tensions. Analysts eye 25,400 support; a break may open downside towards 25,100.
Trade Setup for Feb 20: Nifty slips below key averages; 25,400 in focus, 25,100 at risk
The Nifty 50 suffered a sharp sell-off on February 19, erasing gains of the previous three sessions in a single day. Rising geopolitical tensions between the US and Iran triggered broad-based selling, pushing the index below key moving averages and raising concerns over whether the 25,400 support will hold or if the next leg down towards 25,100 is likely.
The domestic equity market witnessed heavy selling pressure on Wednesday, with the Nifty 50 closing near the day’s low after failing to sustain early gains. The index opened about 54 points higher but quickly reversed from near the 25,900 level as selling intensified through the session.
By the close, the Nifty had plunged 365 points to settle at 25,454, marking its weakest close since the post-Budget session on February 3. The sharp decline led to an erosion of over ₹7 lakh crore in the total market capitalisation of BSE-listed companies in a single trading session.
Sectoral performance remained uniformly weak, with all indices ending in the red. Realty, Media, Auto and Consumer Durables were among the worst-hit sectors. Broader markets mirrored the weakness, as the Nifty Midcap 100 fell 1.6% and the Nifty Smallcap 100 declined 1.27%.
Amid the sell-off, only a handful of stocks managed to post gains, while heavyweights from aviation, cement and auto stocks dragged the indices lower.
Looking ahead, market participants will track key macroeconomic data due on February 20, including India’s Manufacturing and Services PMI, US inflation data and US GDP numbers, which could influence near-term sentiment.
On the technical front, analysts warned of rising downside risks. Experts noted that the Nifty has slipped below its short-term moving averages in a single session, signalling a potential trend reversal. A decisive break below the 25,400–25,370 zone could accelerate selling pressure and drag the index towards the 25,200–25,100 range. Meanwhile, resistance is seen around the 25,550–25,700 band, and any rebound is likely to face selling pressure near these levels.
