Trade Setup for November 24: Nifty remains in buy on dips mode till it sustains above 25,850 levels

The benchmark Nifty 50 index saw a highly volatile session on Friday, opening with an 83-point gap-down. Early weakness lasted for the first hour, followed by a strong intraday recovery of 123 points from the morning low.

However, after 1 pm, Nifty failed to hold its gains and reversed sharply, falling 127 points from the intraday high of 26,179 to close 124 points lower at 26,068. Multiple attempts to recover from the morning lows were unsuccessful, with selling pressure intensifying toward the close.

Indian equities snapped a two-day winning streak, with all major indices ending in the red.

Nifty closed below 26,100, with 30 stocks in the red. Among Nifty constituents, only a few stocks bucked the trend, with Maruti, Tata Consumers, and MAX Healthcare leading the gains. Metal stocks faced major selling pressure, with JSW Steel, Hindalco, and Tata Steel among the top laggards.

Sectoral performance was broadly weak, with all indices except Nifty FMCG ending in the red. Nifty Metals, Realty, and PSU Banks recorded the steepest declines.

IT stocks came under pressure following weakness in US tech shares, despite Nvidia reporting better-than-expected quarterly results, adding to the drag on domestic technology counters.

The broader market also underperformed the benchmark. The Nifty Midcap 100 fell 1.13%, while the Nifty Smallcap 100 dropped 1.22%.

Market sentiment was further pressured by fresh uncertainty around US monetary policy, as September employment data showed stronger job additions, reducing the likelihood of a December rate cut.

Meanwhile, the Indian rupee slipped to a record low of 88.83 against the US dollar amid weak risk appetite and fading expectations of a Fed rate reduction, surpassing its previous highs of 88.80 touched earlier this month and in late September.

Looking ahead, experts expect cautious optimism. Siddhartha Khemka of Motilal Oswal said markets are likely to remain firm next week, driven by buying on dips, improving demand outlook in Q3, and resilient flows, with any progress on India-US trade talks serving as a key short-term catalyst.

Nagaraj Shetti of HDFC Securities said that Nifty's near-term trend remains positive, with current weakness likely forming a higher bottom around 26,000-25,900 over the next few sessions.

He expects a bounce from support levels next week, while immediate resistance lies around 26,250-26,300.

Nilesh Jain of Centrum Broking expects a phase of consolidation before the next upward move, with Nifty likely oscillating between 25,800 and 26,200. The 21-day moving average, near 25,840, could provide key support, while a breakout above recent swing highs may pave the way for fresh record levels around 26,300.

He also flagged the volatility index, which jumped over 10% past 13, as a concern that needs to cool below 12.5 for bulls to regain control.

Rupak De of LKP Securities said sentiment may remain challenging in the near term, with the decline potentially extending toward 25,920-25,900, while resistance is seen at 26,166, a move above which could improve market sentiment.

Nandish Shah of HDFC Securities said that despite Friday's sharp fall, Nifty remains above its 5-day exponential moving average (5DEMA) at 26,038.

He added that a break below this level could see the recent swing low of 25,856 act as crucial support, while 26,277 continues to serve as short-term resistance.