Trade Setup for February 16: Near-term bias for the Nifty remains sideways to bearish

Indian equities ended the week on a weak note as sustained selling pressure pushed the Nifty below crucial moving averages. Technical indicators now point to rising downside risk, with market experts warning that the index could drift toward the 25,000–25,200 zone if key supports fail to hold.

The benchmark index opened Friday with a sharp 236-point gap-down and remained under pressure throughout the session, slipping to an intraday low of 25,444 before closing near the same level. The Nifty settled at 25,471, down 336 points (1.3%), marking its second straight session of losses and a decisive break below the 25,500 mark.

Market Performance and Sectoral Trends

Losses were broad-based, with IT stocks leading the decline. Heavyweights such as Infosys, TCS, HCLTech, Wipro and Tech Mahindra accounted for much of the weakness, pushing the IT index down nearly 8% for the week, its steepest weekly fall in a year.

Metals, realty and FMCG stocks also ended lower, while broader markets underperformed. The midcap and smallcap indices fell close to 2% each, highlighting deeper risk aversion.

Defence and PSU bank stocks were notable exceptions, gaining around 4% over the week.

Technical View: Supports Under Threat

From a technical standpoint, the Nifty has slipped below its 21-day, 50-day and 100-day moving averages, signalling a shift in near-term trend. Analysts believe a sustained move below 25,450 could open the door for a decline toward 25,200, close to the 200-day EMA.

Market experts also caution that rallies may attract selling pressure as long as the index remains below 25,800, which is seen as a key resistance zone. A break below 25,100–25,200 could further weaken sentiment and increase the probability of a test of the 25,000 level.

Outlook

With global cues mixed and technical damage visible on charts, the near-term bias for the Nifty remains sideways to bearish. Traders are advised to remain cautious, track key support levels closely, and adopt a sell-on-rise strategy until the index regains lost ground above major moving averages.