Trading Plan: Will Nifty 50 hold above 25,400, Bank Nifty defend 61,000 on the first day of March series?

Nifty outlook for February 25

• If Nifty rebounds after the sharp sell-off, it may face a hurdle at 25,500–25,600
• Nifty may retest the 25,300–25,200 levels if it decisively falls below 25,400.
• Bank Nifty is likely to maintain sideways trade until it trades below its record high

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The Nifty 50 nosedived sharply, slipping below all key moving averages (barring the 200-day EMA), while momentum indicators gave a sell signal and the Volatility Index stayed above the 14 zone. If the index rebounds after the sharp sell-off, it may face a hurdle at 25,500–25,600. However, in the case of further consolidation, the index may retest the 25,300–25,200 levels if it decisively falls below 25,400. Meanwhile, the Bank Nifty is likely to maintain sideways trade until it trades below its record high, with support at 60,800–60,500. However, 62,000 is the level to watch in case of a convincing rally above the record high, experts said.

On February 24, the Nifty 50 plunged 288 points (1.12 percent) to 25,425, while the Bank Nifty slipped 217 points (0.35 percent) to 61,047. Bear dominance was visible in market breadth, with about 2,102 shares declining compared to 835 shares advancing on the NSE.

Nifty Outlook and Strategy

Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors

In the previous session, Nifty witnessed a weak start and remained under pressure throughout the session, largely due to intense selling in IT stocks amid fears of AI disruption. The Nifty IT index extended its five-session losing streak by slipping to a 52-week low.

On the daily chart, Nifty is consolidating near the 50 percent Fibonacci retracement of the gap formed on February 3, which had emerged following the India–US trade deal. The next critical support is placed around 25,250, coinciding with the 200-day EMA. A decisive break below this zone could accelerate downside momentum.

Overall, the index is moving in a lacklustre manner. A break below 25,320 could result in a move toward the 200-day EMA support at 25,250. On the upside, a break above 25,780 is required for fresh buying to emerge.

Key Resistance: 25,780

Key Support: 25,190

Strategy: Short positions can be created below 25,320 with a stop-loss of 25,390 and targets of 25,250 followed by 25,190.

Aditya Thukral, Founder & Analyst of AT Research & Risk Managers

The Nifty 50 recorded its lowest close in the last 16 trading sessions. The immediate trend remains sideways to negative, as the structural formation of lower highs and lower lows depicts a downtrend within the broader sideways range of 25,300 to 25,900. The index has been hovering around the 20-day, 50-day, and 100-day EMAs over the past eight trading sessions, with four sessions closing below and four sessions closing above these EMAs. As the bias remains negative, it now appears ready to test the 200-day EMA, which is currently around 25,250.

From the positioning in the derivatives segment, immediate resistances are seen at 25,500 and 25,600, with no strong supports found before 25,000 at present.

Key Resistance: 25,570, 25,770

Key Support: 25,250, 25,100

Strategy: Sell Nifty Futures on a rise toward 25,730 with a stop-loss of 25,880, targeting 25,430.

Preeti K Chabra, Founder of Trade Delta

Nifty formed a strong bearish candle on the daily chart, giving up the gains of the last two sessions. The index closed below the 20-day SMA (25,595) and the 40-day EMA (25,654), signaling short-term weakness. It has also slipped below the 50 percent Fibonacci retracement level at 25,480 (24,587–26,373 rally), indicating a loss of bullish momentum.

The next key support is seen at the 61.8 percent retracement level near 25,269. A break below this level could extend the decline toward the 25,000 zone.

The daily RSI at 45.3 is below its signal line, suggesting building bearish momentum. Derivatives data, with unwinding in in-the-money puts, reflects a cautious to negative bias.

Overall, the structure favours a sell-on-rise approach as long as the index remains below the 25,600–25,650 resistance zone.

Key Resistance: 25,595, 25,654

Key Support: 25,318, 25,269

Strategy: Consider selling Nifty Futures near 25,595 for targets of 25,318 followed by 25,269, with a stop-loss of 25,654.

Bank Nifty - Outlook and Positioning

Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors

Over the past week, Bank Nifty has lost momentum and entered a consolidation phase, oscillating within the 60,600–61,700 range and forming a triangle pattern. Ongoing global developments have kept sentiment fragile, making it difficult for the index to establish a clear directional trend, with frequent shifts lacking follow-through.

Triangle formations are always challenging to trade, which is further reflected by the daily ADX hovering near 16, signaling weak trend strength. However, PSU banks have outperformed private banks over the past week, providing support to the index and helping contain downside risks.

Overall, Bank Nifty is stuck in a consolidation phase. A break above the prior record high of 61,764 is required for bulls to regain control, with 60,600 acting as crucial support. A breakdown below this level could suggest a short-term top formation.

Key Resistance: 61,764

Key Support: 60,600

Strategy: Long positions can be created if the banking index gives a 15-minute close above 61,160, with a stop-loss of 60,950 and targets of 61,370 followed by 61,500.

Aditya Thukral, Founder & Analyst of AT Research & Risk Managers

The banking index is trading within a rising channel, where supports are now seen at 60,800 and resistances at 62,100. Prices have been consistently closing above all the major EMAs — the 20-day, 50-day, 100-day, and 200-day — with all EMAs sloping higher.

However, the formation of lower highs and higher lows makes the immediate trend sideways, with the range seen between 60,800 and 61,400. The index is now searching for a directional move, which could emerge in either direction. In such cases, trading in the direction of the larger trend — which is bullish in this case — is advisable.

Positioning in the derivatives segment shows immediate sideways action, as both call and put option writers are active at the 61,000 strike price.

Key Resistance: 61,400, 61,770

Key Support: 60,800, 60,400

Strategy: Buy Bank Nifty Futures on dips around 61,200 with a stop-loss of 61,000, targeting 61,600.

Preeti K Chabra, Founder of Trade Delta

Bank Nifty formed a bearish candle but continued to display relative resilience compared to Nifty. Despite the negative close, the index remains comfortably above the 20-day SMA (60,396) and the 40-day EMA (60,073), reflecting underlying structural strength.

Importantly, Bank Nifty is sustaining above the 23.6 percent Fibonacci retracement level at 60,677 (drawn from 57,157 to 61,764), which now serves as a key support zone and maintains the broader bullish bias.

However, the daily RSI at 57.1 has slipped below its signal line, indicating a slowdown in upward momentum.

On the derivatives front, the beginning of the new monthly expiry cycle shows a lack of clear directional cues, suggesting that positioning is still developing.

Overall, the broader structure remains positive, but with momentum cooling off, a cautious buy-on-dips approach is preferred, backed by strict stop-loss discipline below key support levels.

Strategy: Buy Bank Nifty Futures near the cash reference level of 60,800 for an upside target of 61,435 followed by 61,517, while maintaining a strict stop-loss of 60,677.

Key Resistance: 61,435, 61,517

Key Support: 60,800, 60,677

Strategy: Buy Bank Nifty Futures near the cash reference level of 60,800 for a upside target of 61,435 followed by 61,517, while maintaining a strict stop-loss of 60,677.