Trade Setup for February 24: Nifty faces stiff resistance at 25,800 ahead of February monthly expiry

The Nifty 50 index extended its rally for a second consecutive session on Monday but encountered stiff resistance near its 50-day moving average at 25,740.

After opening with a gap-up, the index failed to sustain higher levels and slipped back below the 50-DMA due to weak follow-through buying.

The benchmark had started the day on a strong note after the US Supreme Court's 6-3 ruling striking down President Trump's broad emergency tariffs. However, the Nifty pared gains sharply, correcting nearly 160 points from its intraday high of 25,771 to a low of 25,609. It later recovered over 110 points after 2:15 pm.

The index eventually settled 141 points higher at 25,713.

Among index heavyweights, Adani Ports, Kotak Mahindra Bank and HDFC Life emerged as top gainers, while Hindalco, Wipro and Infosys came under selling pressure.

IDFC First Bank plunged over 16% after disclosing a ₹590 crore fraud at its Chandigarh branch, marking its steepest single-day decline since March 2020.

Hindustan Aeronautics Ltd. fell more than 3% amid developments related to the LCA Tejas aircraft. The company clarified that there have been no recent crashes of Tejas jets, responding to media reports that claimed the entire single-seat fleet had been grounded by the Indian Air Force following a recent incident.

Sectorally, the trend was mixed. PSU Banks, Auto and FMCG indices posted the strongest gains, while IT, Chemicals and Consumer Durables ended in the red.

The Nifty Midcap 100 slipped 0.43%, while the Nifty Smallcap 100 edged up 0.29%.

Technical view

According to Nilesh Jain of Centrum Finverse, a decisive move above 25,800 is crucial to trigger short covering, which could propel the index towards 26,000.

On the downside, immediate support is placed at the 21-DMA near 25,570.

With the February monthly F&O expiry approaching, Jain expects heightened volatility in the index.

Despite the day's recovery, the Nifty failed to clear the 25,885 resistance level. A sustained move above this mark could push the index towards 26,000, while 25,570 remains a key immediate support, said Nandish Shah of HDFC Securities.

Going ahead, the 25,800-25,830 zone is expected to act as an immediate hurdle for the Nifty, according to Sudeep Shah of SBI Securities.

Shah added that any sustained move above 25,830 could trigger a sharp rally towards 26,000.

On the downside, the 25,600-25,570 band will serve as crucial support, Shah said.

Rupak De of LKP Securities said that a flow of contradictory news kept the index largely confined within the range of the 21-EMA at 25,641 and the 50-DMA at 25,737.

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