Trade Setup for November 4: Nifty likely to bounce back and retest recent swing high

After two sessions of sharp weakness, the Nifty50 turned range-bound with a positive bias on Monday. The index opened on a weak note but recovered smartly from the day's low of 25,645 in early trade.

However, the rebound lost some steam in the latter half, and the Nifty eventually settled near the day's high, up 41 points at 25,763.

The broader markets outperformed, with the Nifty Midcap100 hitting a fresh 52-week high of 60,400, its highest level since October 1, 2024, before closing 462 points higher at 60,287. The Smallcap100 index also gained 0.7%. Large-cap underperformance persisted through the session.

Sectorally, most indices closed in the green, barring FMCG, Consumer Durables, and IT, which slipped marginally. Nifty Realty was the top gainer, up 2.2%, supported by strong quarterly results and sustained sales momentum.

PSU Banks climbed 2% amid policy support and reports of potential sectoral consolidation, while Pharma rose 1.3% after two sessions of profit booking.

In macro cues, October car sales hit a record high, rising 17% year-on-year, driven by festive demand and recent GST cuts. On the earnings front, of the 27 Nifty companies that have reported so far, aggregate profit growth stands at 5% YoY, slightly below estimates of 6%.

Investors now await India's Manufacturing PMI data and the US JOLTS job openings report. Key results scheduled for release on Tuesday include State Bank of India

, Mahindra & Mahindra, Adani Ports, InterGlobe Aviation, and Indian Hotels.

Siddhartha Khemka of Motilal Oswal Financial Services said markets are likely to track the ongoing earnings season, while any positive trigger on the India-US trade deal front could lift sentiment.

Nagaraj Shetti of HDFC Securities said that the near-term uptrend remains intact, with the Nifty expected to bounce back and possibly retest the recent swing high of 26,100 in the coming sessions. Immediate support is placed at 25,650.

Hrishikesh Yedve of Asit C. Mehta Investment Intermediates said, "If the index holds above 25,645, a relief rally could be possible; however, a sustained move below this level may extend weakness toward 25,450-25,400, where the next major demand zone is placed. On the higher side, 26,100 continues to act as stiff resistance, and any bounce should be used for profit-booking."

Rajesh Bhosale of Angel One maintained a buy-on-dips approach, identifying 25,650-25,600 as the immediate support zone and 25,500 as a strong retracement base. Resistance, he said, lies around 25,900-26,000, with the upper band of last week's range near 26,200-26,300 acting as a major hurdle.

According to Nilesh Jain of Centrum Broking, the 25,800 level remains a key resistance point. A decisive breakout above this could pave the way for further upside towards 25,900-26,000.