Week Ahead

Equity benchmark indices snapped a two-week winning streak amid rising volatility, losing around 2.5 percent in the week that ended on February 14, the biggest weekly loss in the last eight weeks. Persistent selling by FIIs, uncertainty surrounding US trade policies and tariffs, and weak corporate earnings weighed on the market's mind.

The Nifty 50 fell 631 points (2.68 percent) to 22,929, the biggest weekly loss since the week of December 16-20, and the BSE Sensex plunged 1,921 points (2.47 percent) to 49,099. The broader markets were also hit badly with the Nifty Midcap 100 and Smallcap 100 indices declining 7.4 percent and 9.4 percent, respectively, amid the risk of further earnings weakness.

Considering the significant selling pressure, the market initially may try to rebound next week (February 17), but sustainability is key given the ongoing sell-on-rally trend. Overall, it is expected to consolidate with a focus on FOMC and RBI minutes, Ukraine-Russia peace talks, and manufacturing and services PMI flash data.

Technically Nifty remains in the grip of bears as it traded below its 10 and 20-week EMAs, and also below the resistance trendline with a negative bias in momentum indicators. But considering the weakness seen last week, and a Tweezer bottom pattern formation on the four-hourly charts, a rebound early next week can't be ruled out. According to experts, in case of a rebound, the index may face a hurdle at 23,250, followed by 23,600, but in case the index breaches 22,900, 22,750 is expected to be the immediate support, followed by 22,600-22,500.

Weekly options data indicates that the Nifty is expected to be in the 22,000-24,000 range in the short term, with resistance at 23,300 and support at 22,800.