Trade Setup for February 11: Nifty slips below key support, eyes 23,200 in the short term

The Indian equity market extended its losing streak to a fourth consecutive session on Monday, marking its longest downturn in two months. After opening lower, the market continued its decline in the early session before stabilizing in a range-bound phase with a slight recovery in the latter half.

Market Performance

Nifty struggled under persistent selling pressure, closing 178 points lower (-0.76%) at 23,381.6. While the index managed to recover 50 points from its intraday low of 23,316, overall sentiment remained weak. Trading volumes in the NSE cash market dropped significantly, down 17% from the average, reaching the lowest levels of 2025.

The broader markets faced even steeper losses, with midcaps underperforming large caps. The midcap index plunged 1,138 points (-2%) to settle at 52,471, while the Nifty500 declined by 1.4%. Both smallcap and midcap indices fell 2.2%, reflecting intense selling pressure across sectors.

Among the Nifty500 constituents, most stocks saw declines, with nearly half losing over 75% of their value. Around 40 Nifty stocks closed in the red, with some slipping by as much as 5%.

Sectoral Highlights

Metal Stocks Decline Amid US Tariff Announcement

The Nifty Metal Index tumbled 3% following US President Donald Trump's announcement of fresh tariffs on imported steel and aluminum. Metal giants Vedanta and SAIL lost over 4.5% each, while Tata Steel, NALCO, JSW Steel, and Hindalco saw declines ranging from 1.5% to 3.3%.

Retail and Institutional Moves

Trent Ltd. emerged as the biggest laggard of the day, dropping 4.7%.

Foreign portfolio investors (FPIs) continued their selling spree, citing high valuations and slowing economic growth. Since September last year, FPIs have offloaded nearly $22 billion from Indian equities, with 2025’s outflows approaching the $10 billion mark. On Monday, FPIs were net sellers in the cash market, while domestic institutional investors (DIIs) stepped in as net buyers.

Technical Outlook: Nifty 50

Technical indicators suggest a continued downtrend, with Nifty forming a lower top on the daily chart and breaching the crucial 21-day Exponential Moving Average (EMA). The Relative Strength Index (RSI) has entered a bearish crossover, further signaling weakness.

Support Levels: The trend may worsen if Nifty slips below 23,350, potentially dragging it toward 23,000. If it sustains below this level, further downside is likely.

Resistance Levels: Immediate resistance is seen at 23,550.

According to Rupak De, Senior Technical Analyst at LKP Securities, "A slide below 23,220 could nullify the bullish higher top and bottom pattern, which may intensify selling pressure."

HDFC Securities' Nagaraj Shetti added, "With Nifty breaking below 23,400, a move towards 23,200 or lower is expected in the short term."

Technical Outlook: Nifty Bank

Nifty Bank remains in a tight consolidation phase, hovering above its breakout level from the Double Bottom pattern. The index is struggling to stay above its 50-day and 200-day EMAs, limiting upward momentum.

Resistance: 50,500–50,600 (fresh call writing observed)

Support: 49,900–49,650 (defended by put writers)

A decisive breakout in either direction will determine the index’s next move. Until then, a range-bound strategy is expected to dominate trading in the near term.