Trade Setup for November 12: Nifty eyes a move back towards 26,000 this week as uncertainties ease

The Indian equity markets witnessed a highly volatile session on Tuesday, with strong moves on both sides before bulls regained control. The Nifty50 index staged a sharp rebound from lower levels and ended near the day's high, recovering most of last week's losses.

The benchmark index rose 121 points to close at 25,695, after slipping to an intraday low of 25,449 in early trade. The recovery gathered pace post 10:45 am, with the index surging more than 250 points from the day's low.

Positive global cues lifted sentiment, with 40 of the 50 Nifty stocks closing in the green. Among the top gainers were IndiGo, BEL, and M&M, while Bajaj Finance, Bajaj Finserv, and ONGC saw profit-booking.

Sectorally, IT, auto, and metal indices led the gains, while PSU banks, realty, and financial services ended slightly lower.

In the broader market, the Nifty Midcap 100 climbed 0.5% to a record high, even as the Nifty Smallcap 100 slipped 0.21%.

Q2 earnings season to wrap up on a positive note

Market participants are now eyeing key corporate results due Wednesday, including Hindustan Aeronautics, Asian Paints, Tata Steel, Info Edge, Ashok Leyland, and Prestige Estates, for fresh sectoral cues.

Analysts expect the Q2 earnings season to wrap up on a positive note, aided by a stronger-than-expected performance from the broader market.

They also flagged that near-term direction will hinge on corporate results and developments in US-India trade discussions, which could influence investor sentiment.

Technically, experts see a strong setup building

Nandish Shah of HDFC Securities said the Nifty closed above its 20-day DEMA resistance at 25,600, retracing 50% of its recent decline from the 26,100 level. A decisive move above 25,800, he added, could negate the existing downtrend and pave the way for further upside.

Nilesh Jain of Centrum Broking said the overall trend looks positive and a breakout above 25,800 could open the door for a rally toward 26,000. Support has now shifted higher to around 25,450, making a buy-on-dips strategy favorable in the current setup.

Nagaraj Shetti of HDFC Securities said the underlying trend remains bullish, with next upside targets at 26,000-26,100 in the coming week, and immediate support near 25,500.

Rajesh Bhosale of Angel One added that a breakout above the 25,750-25,800 resistance zone could trigger further momentum, while the 25,600-25,500 range should act as strong support.

The Bank Nifty also rebounded smartly after hitting a low of 57,594, forming a bullish candle with a long lower shadow, which is a sign of buying at lower levels.

Sudeep Shah of SBI Securities said the 58,300-58,400 zone will act as a key hurdle, and a sustained move above 58,400 could push the index toward 59,000, while 57,700-57,600 remains the near-term support range.