🔍 Nifty50 Technical Analysis for Monday, 3rd November 2025
Is Nifty Pausing for a Healthy Pullback or Preparing for a Fresh Rally?
The Nifty50 index ended the last trading session at 25,722, losing about 155 points or 0.60%, as the market witnessed profit-booking after a steady uptrend that had stretched over the past few weeks. The fall, however, didn’t come with panic — volumes remained moderate and no structural breakdown was visible.
This signals that the index might be in a short-term consolidation or a healthy pullback, giving both traders and investors a chance to reposition for the next move.
🧭 Chart Reading & Technical Structure
Looking at the daily chart, the Nifty has been moving in a well-defined uptrend channel since early October, supported by the 20-day and 50-day exponential moving averages (EMAs).
- The 20 EMA, currently near 25,939, has acted as a dynamic resistance over the last few sessions.
- The 50 EMA around 25,015 continues to serve as a strong support zone.
- The 100 EMA and 200 EMA, placed near 24,613 and 24,018, respectively, are also sloping upwards — confirming the continuation of the broader bull trend.
This setup indicates that while short-term momentum has slowed, the medium-term structure remains intact and positive.
📉 Candle Formation and Market Psychology
The index has formed a small bearish candle on the daily chart, showing a bit of hesitation among buyers after the recent rally. Such candles often appear near swing highs and generally represent a pause, not necessarily a reversal, unless followed by a heavy volume breakdown in subsequent sessions.
Traders should interpret this as a cooling-off phase, where markets digest earlier gains before deciding the next directional move.
📊 RSI & Momentum Indicators
The Relative Strength Index (RSI) currently stands around 57.8, coming down from the overbought territory. This cooling RSI is healthy — it signals that the market is resetting its momentum and preparing for a fresh leg of movement without entering exhaustion.
In simpler terms, the market is catching its breath, not collapsing.
💼 Volume & Market Breadth
The volume pattern suggests that sellers were not aggressive — the candles didn’t show panic or wide-range bars. Instead, this phase looks like institutional profit-booking, often seen before a new short-term upmove resumes.
Also, broader market indices like Midcap and Smallcap are holding relatively firm, which gives further confidence that the correction is likely time-based rather than price-based.
⚙️ Practical Trading Strategy for Monday (3rd November 2025)
This is where theory meets practice. Let’s break it down for both sides of the market — bulls and bears.
🟢 Bullish Setup – “Buy on Dips” Approach
If the Nifty opens slightly weak or flat and finds support near 25,600 – 25,500, traders can look for a buying opportunity with a short-term view.
- Buy Zone: 25,600 – 25,500
- Stop Loss: 25,420 (just below the recent support and 20 EMA zone)
- Target 1: 25,950
- Target 2: 26,100
This setup works best if the index shows early recovery signals with buying interest visible in banking, auto, and IT sectors.
A sustained move above 25,950 can invite short covering, potentially pushing Nifty toward 26,100 or higher.
For positional traders, it’s advisable to maintain long exposure with a trailing stop-loss below 25,400. The medium-term momentum remains bullish, and dips are still opportunities rather than threats.
🔴 Bearish Setup – “Sell on Rise” Strategy
If global cues remain weak and Nifty fails to sustain above 25,950 – 26,000, intraday traders can adopt a cautious sell-on-rise approach.
- Sell Zone: 25,950 – 26,000
- Stop Loss: 26,120
- Target 1: 25,600
- Target 2: 25,400
However, it’s important to note that this trade is counter-trend, and must be taken only if Nifty shows clear rejection near the 26,000 zone with weak market breadth and higher intraday volumes on the sell side.
Always remember — in a bull market, short trades are tactical and should be exited quickly.
🧩 Learning Takeaways for Traders
- Respect the Trend:
Never go aggressively against the larger trend. Nifty’s long-term uptrend is still intact — short-term corrections are buying opportunities, not reversal signals. - Wait for Confirmation:
Avoid pre-empting moves. Let the first 30–45 minutes of Monday’s session define the tone — whether the bulls or bears take control. - Sector Rotation is Key:
Watch out for leadership from Bank Nifty and IT stocks — they often guide the broader index’s direction. If these sectors show strength, Nifty is likely to bounce back quickly. - Use Trailing Stop-Loss:
In trending markets, trailing stop-loss is your best friend. It helps lock profits while letting the position ride further. - Global Cues & FII Flows:
Keep an eye on the U.S. market’s Friday close, crude oil trends, and FII flow data — these are critical triggers that influence Monday’s sentiment.
🔔 Conclusion
The Nifty50 is currently at a critical juncture, where a short-term pullback is clashing with a strong medium-term uptrend. As long as 25,400 holds on a closing basis, the market structure remains bullish.
If Nifty crosses 25,950 with volume support, expect momentum buying to resume toward 26,100–26,250 levels. Conversely, a breakdown below 25,400 might trigger a deeper retracement toward 25,000, but that looks less likely unless global sentiment worsens.
👉 Final View: Adopt a “Buy on Dips” approach, remain disciplined with stop losses, and let the trend guide your trade — not emotions.
Disclaimer
The views and analysis provided above are for educational and informational purposes only and should not be considered as financial or investment advice. Trading and investing in the stock market involve risk, and past performance does not guarantee future results.
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