By Dalal Street Investment Journal (DSIJ)
Trade setup for tomorrow, February 23: Nifty holds above the 200-DMA; Trump raises global tariff to 15% a day after the US Supreme Court ruling, which may drive the early move. Resistance is placed in the 25,650–25,780 zone.
The Nifty 50 started Friday’s session on the back foot and slipped below 25,400 early in the day. That dip, however, attracted buying near the Monday, February 16 lows, triggering a sharp rebound of nearly 300 points from the intraday low. The recovery ran into supply at higher levels, and the index ended off the day’s high, yet still closed up 0.46% at 25,571.25.
On the daily chart, the index formed a bullish candle with a long upper shadow. Coming right after Thursday’s sharp sell-off (February 19), this structure signals an attempt to stabilise from the lows and, importantly, a lack of immediate follow-through selling. The catch is that the overhead setup remains heavy: the 20-DMA and the 100-EMA form an immediate resistance band, which could cap upside attempts. The Nifty also closed below the 100-EMA for the second straight session.
The weekly picture is still not decisive in favour of the bulls. The index failed to reclaim the 10- and 20-week averages and formed a candle with a long upper shadow; typical of rejection at higher levels. The broader structure continues to show a lower-high, lower-low formation, and the index is currently sitting around the midpoint of its last 40-week range. While the Nifty is only about 3% below its all-time high close, the broader market is clearly weaker: a majority of stocks are trading below their 200-DMA, with over 60% of the Nifty 500 below that long-term moving average.
Key levels are now well-defined. The 200-DMA near 25,324 is the first line of support. A sustained break below that would open the door to the major support near the 50-week average around 24,918. On the upside, the 25,650–25,780 zone is immediate resistance. Until the index closes above this band, avoid chasing aggressive long positions. Beyond that, 25,890–26,070 remains the formidable supply zone.
Momentum indicators are mixed and still leaning cautious. RSI readings are neutral across timeframes. The weekly MACD remains bearish, while the daily MACD is hovering near the zero line and is close to flashing a bearish signal. The Elder Impulse system is also showing strong bearish pressure. On the hourly chart, the index closed below the moving-average ribbon, with MACD below zero; both consistent with near-term weakness.
For the next session, global cues may add volatility after US President Donald Trump announced fresh tariffs following a Supreme Court of the United States verdict. In such a tape, the opening hour often sets the tone. Treat the first-hour high and low as your reference range. If there is an early euphoric spike, it needs to sustain above the first-hour high to be taken seriously; otherwise, it is likely to fade into consolidation. For a cleaner bullish read, the index must also reclaim and close above the 50-DMA near 25,741. If it fails to do so, expect more sideways-to-negative price action rather than a clean trend day.
The broader strategy is straightforward: let the first hour settle, mark its high and low, and trade only once the index shows where it can sustain. Avoid rushed decisions at the open. The first hour is likely to be action-packed, and the higher-probability trades typically emerge only after the market reveals whether it is accepting prices above resistance or breaking down below support.
SEBI Registered Research Analyst (INH000006396).
Founded in 1986, Dalal Street Investment Journal (DSIJ) brings decades of experience in India’s equity markets. DSIJ's research combines fundamental analysis with price action, guided by disciplined risk management and capital preservation. They follow a structured, data-driven approach designed to help investors and traders make informed decisions beyond short-term market noise.
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