Introduction
Last Friday was a massive wake-up call for Indian stock market investors. The Nifty 50 index plummeted by 336.10 points (1.30%), closing at 25,471.10. The collapse of the IT sector and global concerns over Artificial Intelligence (AI) created a sense of panic on Dalal Street. With the crucial psychological support of 25,500 broken, the big question remains: Will the market fall further on Monday, February 16, or will it rebound? In today’s blog, we will analyze the reasons behind Friday's crash and discuss the key support and resistance levels for Monday.
Why Did the Market Crash on Friday?
Based on data from various news channels, NSE, and global reports, here are the primary reasons for the decline:
1. Massive Blow to the IT Sector
The Nifty IT index crashed by more than 4% last Friday. Major tech giants like TCS, Infosys, and Wipro witnessed heavy sell-offs, dragging the entire market down.
2. AI Concerns and Global Uncertainty
New global anxieties surrounding AI and rumors of the US Federal Reserve delaying interest rate cuts have made investors nervous. As a result, Foreign Institutional Investors (FIIs) have been aggressively selling their holdings.
3. Closing Below 25,500
Closing at 25,471.10—below the 25,500 support mark—is a bearish signal on the technical charts. This data is crucial for planning our future investment strategies.
Key Technical Levels for Monday (Feb 16)
To avoid wrong moves, stay alert to these specific numbers:
- Support 1: 25,400 (If Nifty breaks this, the market will weaken further).
- Major Support: 25,060 (A very strong support level where a bounce-back is possible).
- Resistance 1: 25,650 (Nifty must cross this to show any sign of recovery).
- Major Resistance: 25,900 (The market needs to sustain above this level to turn positive again).
Advice: Stay cautious and do not take any impulsive steps until these key levels are crossed. Keep a close watch on global news.
What to Watch on Monday Morning?
- Gift Nifty: Check the Gift Nifty trend at 8:00 AM on Monday. This will indicate whether we can expect a Gap-up or Gap-down opening.
- FII & DII Data: Monitor how many crores FIIs sold and DIIs bought on Friday before making your final decision.
- Global Markets: The performance of the US markets (Nasdaq and Dow Jones) on Friday night will heavily influence the first hour of the Indian market.
Trading Strategy and Advice
- For Beginners: It is best to avoid Option Trading in this volatile market as the risk is extremely high.
- For Long-term Investors: If fundamentally strong shares (like Reliance or major banks) drop further, consider buying in small quantities (SIP mode).
- Mandatory Stop Loss: Always use a Stop Loss for every trade to prevent massive financial losses.
- A Final Note: Beginners should stay away from Option buying and selling until positive news triggers a stable trend.
Disclaimer: This analysis is for educational purposes only. Investing in the stock market involves risk. Please consult your financial advisor before making any investment.