The Paradox of the Plunge: A Market in Capitulation, Not a New Bearish Assault
On February 20, 2026, the Bank Nifty market was the scene of a bloodbath, plunging 860 points from the previous day’s close. Logically, one would expect the data to show a massive, multi-thousand-crore new shorting campaign by Foreign Institutional Investors (FIIs). Instead, the data revealed something far more nuanced and significant: a relatively modest net short of 1,999 contracts by the FIIs.
The 860-point drop was not the result of a new institutional attack, but the result of a catastrophic failure of the bulls—a full-scale capitulation event.
Decoding the Data: The Story Behind the Collapse
1. The Main Event: The Great Bullish Surrender
The 860-point decline was overwhelmingly driven by “long unwinding”. This is a panic-driven event where thousands of traders who were previously long the market are forced to sell their positions to stop their mounting losses. This forced, indiscriminate selling creates a “waterfall effect” or a liquidation cascade, where selling begets more selling. The FIIs did not need to launch a new attack; the market was collapsing under the weight of its own failed bullish positions.
2. The FIIs: Pouring Gasoline on the Fire
In this context, the FIIs’ action is incredibly revealing. Seeing the market in a state of panic and capitulation, they did not take profits on their old shorts. Instead, they methodically added nearly 2,000 new short contracts. This is not an act of panic; it is a cold, calculated, and predatory move. They saw the bulls in full retreat and decided to press their advantage, selling into the chaos and pouring gasoline on the fire. This shows their supreme conviction that the breakdown is real and has much further to go.
3. The Crucial Clue: The Rise in Open Interest
This is the most potent and bearish signal of all. In a session of massive decline, the total number of open contracts still rose. This is the definitive signature of a high-conviction, building bear trend. It means that the new FII shorts were met by a fresh wave of new, hopeful bottom-fishing longs. So, even as the old bulls were being wiped out, a new battle was already being initiated, with the FIIs aggressively taking the sell side. A market that is falling on rising Open Interest is in its strongest and most dangerous bearish phase.
Conclusion
Do not misinterpret the modest FII selling as a sign of their lack of involvement. The true story is of a massive bullish capitulation that the FIIs exploited with predatory precision. The market’s internal structure is profoundly weak, and the data confirms that a new, high-conviction bear phase is now underway. Any recovery attempts are likely to be shallow and will be met with powerful institutional selling.
Last Analysis can be read here
The market continues to move with uncanny precision, flawlessly adhering to our astro-technical model. As forecast in our weekly analysis for members, the Bank Nifty saw a decent decline, with the Venus-driven energy correctly identifying weakness in the financial sector. This successful validation of our forecast now brings us to an even more critical juncture: a high-stakes weekly close that will be directly influenced by a new, potent astrological event.
1. The High-Voltage Catalyst: Venus Square Mercury HELIO
Today’s session is charged with a powerful, fast-acting astrological aspect known to be very important for short-term trading: a Venus-Mercury square. This is the celestial equivalent of a tense argument between the planet of finance/value (Venus) and the planet of trading/communication (Mercury). This aspect is notorious for creating:
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Sharp, conflicting price swings.
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High intraday volatility and “whipsaw” action.
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A market struggling to find a clear, agreed-upon value, leading to a fierce battle between buyers and sellers.
This planetary conflict ensures that a quiet, drifting session is highly unlikely. It will force the market to a decision point.
2. The High-Stakes Verdict: The Battle for the Weekly Close
This intense cosmic energy is being unleashed upon the market at the most crucial time: the weekly closing session. The price action today is not just about intraday direction; it is a strategic battle to “paint the weekly chart” and set a powerful psychological and technical tone for the entire week ahead. The final 30 minutes of trading will be the ultimate arbiter, delivering the final verdict.
Both sides have clear, unambiguous objectives:
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The Bullish Counter-Offensive: The bulls are on the defensive, but they have a clear path to reclaiming control of the trend. Their mission is to invalidate the bearish momentum and stage a powerful recovery.
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The Trigger: A decisive move and hold above 60,820.
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The Targets: A successful breakout would signal a renewed rally towards 61,050 / 61,288.
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The Bearish Continuation: The bears have the clear momentum from the recent decline. Their goal is to press their advantage and secure a decisive, weak weekly close.
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The Trigger: A decisive break below the 60,575 support.
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The Targets: A breakdown here would unleash a new wave of selling, targeting a swift fall towards 60,337, 60,100, and ultimately 59,861.
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Conclusion
Today is a day of decision. The market is being forced out of its indecision by a potent short-term astrological aspect, and its verdict will be sealed in the final moments of the crucial weekly close. The battle lines are drawn with military precision at 60,820 on the upside and 60,575 on the downside. The outcome of this high-volatility fight will not only determine the winner of today’s session but will also likely set the market’s primary trend for the week to come.
Traders may watch out for potential intraday reversals at 09:20,12:50,01:54,03:06 How to Find and Trade Intraday Reversal Times
Bank Nifty Dec Futures Open Interest Volume stood at 11.3 lakh, with liquidation of 2.9 Lakh contracts. Additionally, the Increase in Cost of Carry implies that there was a closeure of LONG positions today.
Bank Nifty Advance Decline Ratio at 00:14 and Bank Nifty Rollover Cost is @59457 closed above it.
The Bank Nifty options data reveals a market in a state of high-stakes conflict, with bullish momentum directly challenging a structure built with bearish caution. A deteriorating Put-Call Ratio (PCR) of 0.88 signals a clear tilt in sentiment, indicating that call writers are actively working to cap the rally and believe the immediate upside is limited. This creates a significant supply overhang at higher levels.
However, this cautious sentiment is being defied by the market’s powerful price action. The spot price at 60,739 is trading decisively above the Max Pain point of 60,500. This is a highly bullish and unstable dynamic. It signifies that the bulls are currently winning the fight, stretching the market beyond its financial center of gravity and inflicting significant pain on call sellers at the 60,500 strike. This creates the potential for a “short squeeze” if these sellers are forced to cover their positions.
This powerful divergence has forged a clear and formidable battlefield:
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Resistance: The primary and ultimate ceiling for this expiry is the “Great Wall of Calls” located at the 61,000 strike, which holds the highest concentration of Call Open Interest.
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Support: The crucial 60,000 strike has now established itself as the ultimate support floor, holding the highest concentration of Put Open Interest. The 60,500 Max Pain level will also act as a major pivot and secondary support zone.
In conclusion, the bulls are in a commanding but precarious leadership position. The market is in a classic “breakout” phase, fighting against the bearish structure. The path of least resistance remains upwards towards 61,000 as long as the bulls can successfully defend the 60,500 pivot and, more importantly, the major 60,000 support fortress against the inevitable profit-taking pressure.
Bank Nifty Spot – Intraday Technical Setup
Market Observation: The index is currently trading within a defined range. Traders should watch the following pivot zones for potential directional moves:
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Strength (Upside): If the index sustains above 60850 , it indicates bullish momentum. The immediate resistance levels to watch are 61000 61135 61300 .
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Weakness (Downside): Selling pressure is likely to intensify if the index breaks below 60666 . In this scenario, the next support zones are 60555 60343 60108 .
Wishing you good health and trading success as always.As always, prioritize your health and trade with caution.
As always, it’s essential to closely monitor market movements and make informed decisions based on a well-thought-out trading plan and risk management strategy. Market conditions can change rapidly, and it’s crucial to be adaptable and cautious in your approach.
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