Trade Setup February 20: Nifty eyes breakout, support at 22,800, resistance at 23,150

The Nifty 50 is approaching a crucial phase, with market experts highlighting key levels that could determine its next direction. According to Rupak De, Senior Technical Analyst at LKP Securities, the 22,800 level serves as a critical support. As long as this level holds, a major downside move is unlikely. However, a decisive drop below 22,800 could trigger a substantial correction.

On the upside, resistance lies between 23,100 and 23,150. A strong breakout above 23,150 could spark a sharp rally, pushing Nifty toward higher targets.

Market Trends & Analyst Insights

Osho Krishnan, Senior Analyst at Angel One, points out that a strong support base is forming in the 22,700–22,800 zone, aligning with the lower boundary of the Falling Wedge pattern. This suggests a potential for price stabilization and a move upward. However, resistance at 23,000 remains a major hurdle, and only a sustained breakout beyond 23,200–23,250—aligned with the 20-day exponential moving average (DEMA)—could shift the trend decisively toward 23,400, a key level for a potential reversal.

Dhupesh Dhameja, Derivatives Analyst at SAMCO Securities, notes that aggressive call writing at the 23,100–23,150 zone has intensified resistance. A clear breakout will be crucial in shaping the market’s direction.

Market Recap: February 19

On Wednesday, the Indian stock market saw notable intra-day fluctuations. While the Nifty closed nearly flat at 22,933, the broader market performed well, with midcaps leading the charge.

Sensex: Down 28 points, closing at 75,939

Nifty: Down 12 points, ending at 22,933

Nifty Bank: Up 483 points, closing at 49,570

Midcap Index: Surged 776 points, finishing at 50,527

Financial stocks provided stability, with banking shares holding Nifty above 22,900. Meanwhile, defense stocks saw strong buying, while IT stocks remained under pressure.

Stocks to Watch on February 20

Bharat Forge: The company’s unit, Kalyani Strategic Systems, has signed an agreement with AM General (USA) for supplying advanced artillery cannons, marking a significant milestone for India's defense exports.

Mahindra Group: Announced a strategic partnership with Anduril Industries (USA) to integrate AI and autonomous technologies for global defense markets.

Orchid Pharma & Waaree Energies: Expected to be in focus following recent market developments.

FIIs & DIIs Activity

Foreign Institutional Investors (FIIs) were net sellers, offloading ₹1,881.30 crore in equities, while Domestic Institutional Investors (DIIs) net bought ₹1,957.74 crore, indicating continued domestic support for the market.

With Nifty at a crucial juncture, all eyes are on the 22,800 support and 23,150 resistance levels. Traders will be watching closely for a breakout or breakdown to determine the market’s next move.