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As the week concluded on February 21, the Sensex and Nifty faced selling pressure, primarily driven by weakness in auto and financial stocks. A sharp sell-off on Wall Street, concerns over potential disruptions from Trump's proposed tariffs, persistent U.S. inflation, and the Federal Reserve’s cautious stance on rate cuts continued to weigh on investor sentiment.

Foreign Institutional Investors (FIIs) have been aggressive sellers, offloading Indian equities worth Rs 33,527 crore so far this month. Renewed interest in rebounding Chinese stocks has led to a shift in global allocations, further impacting domestic equities.

From a technical perspective, Nifty formed a falling wedge pattern on the daily chart, indicating potential support and a possible rebound. The index is currently in a consolidation phase and is attempting to stage a recovery. Immediate resistance is placed at 23,000 and 23,200; a sustained close above these levels could trigger a bullish breakout, propelling the index towards 23,400 and 23,800. Conversely, key support levels to watch are 22,700 and 22,600. A break below these levels may accelerate selling pressure.

Volatility cooled off as India VIX formed a low of 12.0825 before closing at 14.5300, reflecting a marginal increase in risk perception. Open Interest (OI) data suggests strong support at 22,500 and 22,300, with the highest Put OI concentration at these levels. On the upside, 23,000 and 23,100 hold the highest Call OI, indicating significant resistance. A decisive breakout above 23,000 could trigger short covering and fresh buying, pushing the index towards higher levels.

Support Levels: 22700 - 22600

Resistance Levels: 23000-23200

Overall Bias: Sideways to Bearish

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