Technical View: Nifty may slide to 200 DMA next week if bears break Friday’s low; VIX above 13 signals risk for bulls; Bank Nifty holds 60,000 amid decline

Nifty outlook for next week

• Falling decisively below 20-SMA next week can drive Nifty sharply lower
• Resistance for Nifty placed at 25,600–25,700 zone
• India VIX spikes 13.37% to 13.29, signalling discomfort for bulls

Did our AI summary help?

The Nifty 50 witnessed its biggest single-day fall since Union Budget Day (February 1), nosediving more than 1 percent with across-the-board selling on February 13 after a gap-down opening, tracking weak global cues. Renewed AI-driven disruption fears and caution ahead of US inflation data weighed on sentiment.

Falling decisively below key moving averages (10-, 20-, 50-, and 100-day EMA) on a closing basis and testing the midline of the Bollinger Bands (20-day SMA) intraday in a single session, along with a sharp spike in the VIX, signalled that bears were back in control.

If the Nifty 50 decisively breaks the 20-SMA (25,468) in the following session, bears are expected to gain further strength and may drive the benchmark index down toward the 25,300–25,200 zone (200-DMA/200-EMA) next week. However, in case of a bounce back, resistance is placed at the 25,600–25,700 zone, according to experts.

The Nifty 50 opened sharply lower by more than 200 points at 25,571 and remained under pressure throughout the session. The index hit an intraday low of 25,444 in late trade before closing at 25,471 (the lowest closing level since February 2), down 336 points (1.30 percent).

The index formed a bearish candle with an upper shadow on the daily charts, signalling a bearish move. Momentum indicators such as the RSI (at 46) and the Stochastic RSI showed a bearish crossover, while the MACD inclined downward though it held above the reference line, and the histogram signalled fading momentum. All this indicates weakening momentum and increasing bearish bias.

On the downside, the index is attempting to fill last week’s gap. The crucial support at the 200-DMA, placed near 25,300, is likely to be tested in the near term, Nilesh Jain, VP and Head of Technical and Derivative Research at Centrum Finverse, said.

Overall, according to him, the market structure appears sideways to weak, and pullback rallies are expected to face selling pressure as long as the Nifty remains below the 25,800 mark.

For the week, the Nifty 50 declined 0.87 percent and formed a long bearish candle on the weekly charts, falling below short-term moving averages.

Weekly options data indicated that 25,500 is expected to be a crucial zone for further direction in the Nifty 50 in the upcoming sessions, with support at the 25,300–25,000 zone and resistance at 25,600–25,800. The maximum Put open interest was seen at the 25,000 strike, followed by the 25,500 and 25,300 strikes, with maximum Put writing at similar strikes.

On the Call side, the 26,000 strike holds the maximum Call open interest, followed by the 25,600 and 25,800 strikes, with maximum Call writing at the 25,600, 25,500, and 25,700 strikes.

Meanwhile, the India VIX, also known as the fear gauge, spiked 13.37 percent to 13.29 and moved convincingly above all key moving averages in a single session, signalling discomfort for bulls. Sustaining above the 13 zone could pose a major risk for bulls.

Bank Nifty

The Bank Nifty also traded sharply lower but defended the 60,000 level throughout the session, falling 553 points (0.91 percent) to close at 60,187. The index formed a bearish candle with minor upper and lower shadows on the daily charts after four days of consolidation, indicating minor weakness amid some volatility following the recent rally.

The index fell below the 10-day EMA but still held firm above other key moving averages (20-, 50-, and 100-day EMA) and the midline of the Bollinger Bands, which is a positive sign.

Overall, 59,700 is expected to be a crucial zone for the banking index, as only below this level can bears gain strength. Until then, it may remain range-bound with resistance near 61,000, experts said.

The RSI dropped to 53.83 and fell below the signal line, while the MACD maintained a bullish crossover though it inclined slightly downward, and the histogram signalled fading momentum. All this indicates mild cooling in momentum but not a confirmed trend reversal.

"The Bank Nifty continues to trade above its 20-day moving average placed near 59,700, which remains a crucial short-term support," Vatsal Bhuva, Technical Analyst at LKP Securities, said.

According to him, the broader bullish structure remains intact as long as the index sustains above 59,700. Resistance is placed near 60,800–61,000.

For the week, the banking index was up 0.11 percent, outperforming the benchmark Nifty 50.