The Nifty 50 and Bank Nifty rebounded on February 17 after significant losses in the previous week, raising hopes for further recovery, though the overall trend remains in favor of the bears. If the Nifty 50 closes and sustains above 23,000, the uptrend may extend toward the 23,300–23,500 zone. However, if it sustains below 23,000, it may consolidate with support at 22,800. The Bank Nifty needs to sustain above 49,500 for an upward journey toward 50,000 and 50,500 levels, with 49,500 expected to be immediate support, followed by 48,500 as a key support level, according to experts.

On Monday, February 17, the Nifty 50 gained 30 points to close at 22,960, while the Bank Nifty climbed 160 points to 49,259, despite a negative market breadth. About 1,796 shares declined compared to 835 shares that advanced on the NSE.

Nifty Outlook and Strategy

Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities

Nifty has managed to close in the positive territory after 8 consecutive days of negative closes. It has again managed to hold on to the 22,800 level on a closing basis, making it a crucial support level in the near term. The PCR (Put Call Ratio) has also improved from 0.64 to 0.81, indicating that there have been good Put additions at lower levels, mainly at the 22,600 strikes. Hence, 22,600 is now a crucial short-term support.

On the upside, 23,700 has witnessed aggressive Call writing, followed by 23,300 and 23,500 strikes, so these levels will act as resistance in the near term. The broader range for this week is therefore between the 22,600 and 23,700 levels. The India VIX was up by more than 8.5%, though it cooled off towards the end and closed higher by 4.71% at 15.72. The 16 levels will be critical to watch for in India VIX, as above those levels will indicate further weakness, and if those levels are not breached, it will be a sign of a bounce-back in Nifty 50.

The overall market breadth was positive, indicating that this fall hada relatively lesser impact on the frontline stocks compared to the broader markets. Hence, the downside looks limited, making the risk-to-reward more favorable for the bulls.

Key Resistance: 23,300, 23,500

Key Support: 22,800, 22,600

Strategy: Buy Nifty Futures with a stop-loss below 22,600, targeting 23,500 and 23,700.

Jigar S Patel, Senior Manager - Equity Research at Anand Rathi

Notably, the bears failed for the fourth time in the previous 16 trading sessions to close below 22,800, confirming it as strong support. Additionally, the hourly RSI (Relative Strength Index) shows a bullish divergence, indicating potential upward momentum in the coming sessions. These technical signals suggest a positive outlook for Nifty in the near term.

Key technical levels to watch include immediate resistance at 23,150, where selling pressure may emerge, while 22,800 serves as a crucial support zone.

Key Resistance: 23,150, 23,300

Key support: 22,800, 22,700

Strategy: Buy Nifty Futures near 23,000, with a stop-loss of 22,750, targeting 23,500.

Anshul Jain, Head of Research at Lakshmishree Investments

In Monday’s session, Nifty strongly rejected both the previous week’s and previous month’s lows, signaling a potential trend reversal. The sharp rebound from the key support zone on the 75-minute chart suggests that bulls are regaining control. A break and a sustained move above 23,000 will likely trigger aggressive short-covering, pushing the index toward the daily swing high and the 20-day moving average in the 23,250–23,280 zone.

Additionally, the recent down-move from the monthly VWAP (volume-weighted average price) has resulted in a failed low, trapping late short sellers. With FII net shorts on the index at approximately 1.6 lakh contracts, the market is in a deeply oversold zone, setting the stage for a sharp short-covering rally above 23,000. Traders should watch for sustained strength and volume confirmation, as clearing this key level could fuel a strong upside move in the coming sessions.

Key Resistance: 23,000, 23,250

Key Support: 22,900, 22,790

Strategy: Buy Nifty Futures on dips around 22,900, targeting 23,000 as the first upside level. If Nifty breaks and sustains above 23,000, add fresh longs to ride the short-covering rally toward 23,250. Watch for strong momentum and volume confirmation to sustain the breakout.

Bank Nifty - Outlook and Positioning

Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities

Bank Nifty has also closed in the positive territory in the last trading session, maintaining its outperformance during this fall. Out of the last 4 trading sessions, it went below 49,000 three times but didn’t close below it, clearly indicating that 49,000 is good support on a closing basis. There is also huge open interest built up at the 49,000 strike on the Put side, which coincides with the closing basis data. The PCR has also improved from 0.66 to 0.74, with Put additions at the lower levels and Call unwinding at higher levels. Therefore, until it manages to hold the 48,500–49,000 range as support on a closing basis, the short-term outlook remains bullish.

Key Resistance: 50,000, 51,000

Key Support: 49,000, 48,500

Strategy: Buy Bank Nifty Futures with a stop-loss below 48,500, targeting 50,000 and 51,000.

Jigar S Patel, Senior Manager - Equity Research at Anand Rathi

Bears failed for the third time in the previous 4 trading sessions to close below 48,500, confirming it as strong support. Additionally, the hourly RSI shows a bullish divergence, indicating potential upward momentum in the coming sessions. These technical signals suggest a positive outlook for Bank Nifty in the near term.

Key technical levels to watch include immediate resistance at 49,800, where selling pressure may emerge, while 48,500 serves as a crucial support zone.

Key Resistance: 49,800

Key Support: 48,500

Strategy: Buy Bank Nifty Futures near 49,350, with a stop-loss of 48,700, targeting 50,550.

Anshul Jain, Head of Research at Lakshmishree Investments

Bank Nifty bounced back sharply after rejecting the swing low and the previous day’s low near 48,700. This swift rebound suggests a combination of short covering and fresh buying, reinforcing bullish sentiment. The immediate resistance zone lies between 49,200–49,300, where a breakout could drive the index toward the key swing high of 49,800.

Notably, the 8-day and 20-day moving averages sit just above Monday’s high, but given multiple tests, they have weakened as resistance. The real test lies at the falling 20-day EMA around 49,500—a breach of this level could accelerate short covering, fueling further upside momentum. Until then, traders should adopt a buy-on-dips approach, keeping an eye on sustained strength above resistance for confirmation of a continued bullish trend. A decisive move past 49,500 could set the stage for a stronger rally in the coming sessions.

Key Resistance: 49,500, 49,800

Key Support: 49,000, 48,800

Strategy: Adopt a buy-on-dips approach in the 49,200–49,000 zone, targeting 49,500 as the first upside level. If Bank Nifty breaks above 49,500, add fresh longs for an extended move toward 49,800.