Trade Setup for October 14: Nifty upmove takes a break with earnings holding the key

The Indian equity market ended mixed on Monday but staged a strong rebound from early losses, with the Nifty managing to hold above the 25,200 mark as global cues turned positive.

After a couple of sessions of steady gains, the market showed mild weakness, with the Nifty facing resistance around the 25,400-25,500 zone and moving into consolidation. The index opened lower and traded range-bound with a slight negative bias for most of the day before staging a sharp recovery.

The Nifty touched an intraday high of 25,220, but profit booking in the last hour of trade, particularly after 2:15 pm, led to a dip of over 100 points. Despite that, it managed to close 58 points higher at 25,227.

The Nifty Bank and Midcap indices also recovered to finish in the green. Among sectoral movers, auto stocks were mostly positive, tracking strong vehicle registration data.

Bajaj Auto emerged as the top gainer after leading electric two-wheeler sales in October, followed by TVS Motor and Ather Energy in the second and third spots, respectively.

The broader market indices proved more resilient than the benchmark. The Nifty Midcap 100 gained 0.11%, and the Smallcap 100 fell only 0.17%, both outperforming the Nifty's 0.23% decline.

Siddhartha Khemka of Motilal Oswal expects markets to remain range-bound in the near term, tracking Q2 earnings announcements and evolving global tariff developments. While institutional inflows and domestic fundamentals provide a cushion, volatility may persist as investors assess trade rhetoric and its implications for global growth.

Nagaraj Shetti of HDFC Securities said the short-term trend of Nifty is choppy, but the underlying medium-term trend remains positive. Any further weakness from here could find support around 25,000 levels before bouncing back from the lows.

Nilesh Jain of Centrum Broking believes the overall trend remains bullish as long as the index trades above 25,050, and a gradual upmove towards 25,400 appears likely in the near term.

"A decisive break above 25,300 could trigger short covering, paving the way for further upside. Meanwhile, the base has shifted higher to the 25,200 strike, indicating strong support at that level. Overall, the data setup looks positive, and a sustained move above 25,300 will confirm a follow-up rally in the index," Jain added.