Trade Setup for November 10: Nifty sentiment to remain choppy unless it breaks past key level

The benchmark Nifty50 index extended its losing streak for a third straight session on Friday, November 7, slipping 17 points to settle at 25,492. The index opened 76 points lower and declined further to an intraday low of 25,318 before staging a sharp recovery of over 200 points from the morning trough.

Overall, Nifty has now corrected 786 points from its recent swing high of 26,104. The index has also been trading below its 50-day exponential moving average (EMA), signalling near-term weakness.

Within the Nifty pack, Shriram Finance, Bajaj Finance, and Adani Enterprises were the top gainers, while Bharti Airtel, Tata Consumer Products, and Tech Mahindra witnessed selling pressure and ended among the top losers.

Sectoral performance was a mixed bag, Nifty Metal, PSU Bank, and Financial Services indices gained the most, while Consumer Durables, IT, and FMCG closed with notable losses.

Broader market indices outperformed the benchmarks, with the Nifty Midcap 100 rising 0.63%, even as the Nifty Smallcap 100 edged lower by 0.16%.

Capital market stocks saw strong buying interest after SEBI Chairman's assurance that the weekly options expiry will not be abruptly discontinued, a relief for market participants worried about potential curbs in the derivatives segment.

The primary market also remained active, with the ₹6,600-crore public issue of Billionbrains Garage Ventures (Groww) receiving more than 15 times subscription.

Looking ahead, Siddhartha Khemka of Motilal Oswal expects markets to remain range-bound amid mixed global cues, while optimism around better-than-expected corporate earnings and any progress in India-US trade talks could provide upside support.

According to Nagaraj Shetti of HDFC Securities, the underlying short-term trend of the market remains weak, although the medium-term outlook is still bullish.

Shetti expects Nifty to slide towards the key role-reversal support zone of 25,500-25,400, from where a rebound could emerge, suggesting a "buy on dips" opportunity.

Recently, the index slipped below a critical moving average, setting a deeper bearish tone. Rupak De of LKP Securities said the crucial resistance is placed at 25,600; as long as Nifty remains below this level, sentiment is likely to favour a sell-on-rise strategy.

On the downside, support lies at 25,400, and a breach below this could further strengthen bearish sentiment, he added.

Meanwhile, Nilesh Jain of Centrum Broking said Nifty is approaching a crucial support zone where a rebound could be expected.

The broader structure remains "buy on dips" as long as the index holds above 25,160. A decisive move above 25,700 would confirm a bullish breakout, paving the way for an advance towards 26,000, he said.

For the Bank Nifty, Sudeep Shah of SBI Securities said the 20-day EMA zone of 57,400-57,300 will serve as immediate support, while a breach below 57,300 could extend the decline towards 56,800.

On the upside, the 58,200-58,300 range remains a key resistance, and a sustained move above 58,300 may open the path towards 58,700 in the near term.