Trade Setup for December 11: Nifty grinding lower but broader market pain key ahead of Fed decision

The Nifty50 slipped sharply from its opening levels and extended its losing streak for a third straight session on Wednesday.

Bears stayed firmly in control as the index once again tested Tuesday's low, reinforcing the prevailing bearish tone.

The market opened in the green and even pushed higher early on, but the previous down-gap acted as a stiff resistance zone, triggering a slide through the mid and late part of the session.

Nifty couldn't hold 25,800 as financials and retail stocks dragged the index lower. It eventually closed at 25,758, down 81 points.

The broader markets saw deeper pain, with the midcap index falling over 1%.

In the primary market, Meesho, Aequs and Vidya Wires made their market debut today. Meesho delivered a bumper listing, opening with a 46% premium over its issue price of ₹111 per share.

Globally, attention is on the US Federal Reserve, which is widely expected to cut rates by 25 basis points tonight. Markets are likely to track global cues, with the Fed decision and FOMC commentary shaping the outlook on US growth.

Nagaraj Shetti of HDFC Securities said the recent price action shows bulls are unable to sustain any bounce, making it a sell-on-rise market.

He added that Nifty is now hovering near the 25,700-25,600 support zone, and a breakdown could trigger broad-based weakness. Any rebound, he said, may face resistance around 25,900-26,000.

Rupak De of LKP Securities said the index remains under near term pressure, with immediate support at 25,700. A clean break below this could pull Nifty toward 25,610 and 25,530, while resistance lies at 25,870 and 25,960-26,000.

Sudeep Shah of SBI Securities said that the 50-day EMA zone of 25,730-25,700 is acting as crucial support. A sustained move below 25,700 may drag Nifty toward 25,500. On the upside, the 20-day EMA around 25,950-26,000 is expected to cap gains.