Stock market: How Nifty 50 is likely to perform in short-term? Key levels to watch

Indian stock market: Amid weak global signals, Indian stock indices opened lower on February 24, with Nifty hovering around 22,600. The Sensex dropped by 536.75 points (0.71%) to 74,774.31, while the Nifty fell 171.60 points (0.75%) to 22,624.30. Market breadth showed 745 stocks advancing, 1,781 declining, and 156 remaining.

Last week, the Sensex recorded a decline of 628.15 points (0.82%), while the Nifty slipped by 133.35 points (0.58%). Across four trading sessions, the Sensex lost 685.8 points (0.90%), whereas the Nifty fell by 163.6 points (0.71%).

“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,” said brokerage firm Choice Broking in a note.

Foreign Institutional Investors (FIIs) have been aggressive sellers, offloading Indian equities worth ₹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.

Key levels to watch out for Nifty this week

The brokerage firm further said that Nifty formed a falling wedge pattern on the daily chart, indicating potential support and a possible rebound from technical perspective. 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,” the firm said.

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.

“A decisive breakout above 23,000 could trigger short covering and fresh buying, pushing the index towards higher levels,” it added.