Indian markets are likely to open on a subdued note on February 20 as early indicators suggest mild downside pressure. GIFT Nifty trades near the 25,415 mark with a discount of 30 points compared to the previous Nifty futures close. It is a lower opening amid cautious global sentiment.
Domestic markets witnessed a pullback after a three-day rally. The Sensex declined by 1,236.11 points or 1.48%, to settle at 82,498.14. Nifty 50 fell 365 points or 1.41%, closing at 25,454.35.
Volatility surged sharply with India VIX rising 12% to around 13.60.
Technically, Sensex has slipped below its short-term moving averages. It signals a pause in the recent upward momentum.
Immediate support is placed near the 82,000 mark. A break below this level could open the door toward the 81,500-81,200 zone in the near term. On the upside resistance is seen near 83,300 followed by a stronger supply area around 84,000.
The sharp correction suggests that momentum has temporarily shifted in favor of bears.
The Nifty 50 has formed a bearish engulfing pattern on the daily chart, which indicates a potential reversal in the short-term trend.
Immediate resistance is placed near 25,700 and it aligns with the 100-day moving average while the broader resistance zone remains between 25,900 and 26,000.
On the downside, support is seen at 25,400. A more critical support lies near 25,310 which coincides with the 200-day moving average.
A decisive break below this level could accelerate decline toward the 25,200-25,100 zone in the near term.
In the derivatives segment open interest data indicates significant put writing at the 25,400 strike and heavy call writing at the 25,600 strike.
The Bank Nifty index also came under pressure. It declined 811.25 points or 1.32%, to close at 60,739.55. The index formed a large bearish candle that reflects weakening bullish momentum.
The 20-day exponential moving average positioned around 60,300 is expected to act as immediate support.
Historically the index has found buying interest near this zone. A sustained move below 60,300 could expose the index to further downside toward 60,000.
On the upside, resistance is between 61,100 and 61,200 while a larger resistance band extends toward 61,500-61,750.
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