Nifty May Slide to 200 DMA Next Week: Technical Analysis and Market Outlook

The Nifty 50 witnessed its biggest single-day fall since Union Budget Day, 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.

Nifty Outlook for Next Week

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.

Technical Indicators

The Nifty 50 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.

Bank Nifty Holds 60,000 Amid Decline

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.

India VIX Spikes 13.37% to 13.29

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.

For more information on stock market news and technical analysis, please visit our website.

Weekly Options Data

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.

Conclusion

In conclusion, the Nifty 50 may slide to its 200-day moving average next week if bears break Friday’s low, while the Bank Nifty holds 60,000 amid decline. The India VIX has spiked 13.37 percent to 13.29, signalling discomfort for bulls. For more information on Nifty outlook and Bank Nifty analysis, please visit our website.