Nifty 50 Daily Analysis: Consolidation Before Next Move — What Traders Should Expect on 6th November 2025
The Nifty 50 ended Wednesday’s session at 25,597.65, down by 165 points (-0.64%), signaling mild profit booking after multiple attempts to cross the psychological 26,000 mark. While this correction may appear concerning to short-term traders, the chart structure still supports a bullish undertone for the medium term. What we are witnessing now is a healthy pause after a sharp rally — not a trend reversal yet.
🔍 Technical Overview and Market Context
If we closely observe the daily chart, Nifty is currently resting around its 20-day Exponential Moving Average (EMA) placed near 25,680, which is often considered a short-term trend indicator. The index has slightly closed below this level, hinting at short-term exhaustion among buyers. However, the 50-day EMA at 25,314 and 100-day EMA at 25,041 continue to slope upward — a clear indication that long-term investors are still in control.
This situation represents a classic “consolidation within an uptrend” setup — where short-term traders face volatility, but investors can use dips to accumulate quality stocks.
⚙️ Support and Resistance Levels to Watch
- Immediate Resistance: 25,800 – 25,900 – This zone has consistently seen profit booking. A decisive close above this level could reignite momentum toward 26,050 – 26,100.
- Immediate Support: 25,500 – 25,300 – The market is testing this support band. Any strong bounce from here would confirm that bulls are still protecting their ground.
- Major Support: 25,000 – 24,950 – This area aligns with the 100-day EMA, making it a crucial level for medium-term positional traders. A close below 25,000 would change the short-term outlook to bearish.
📊 Momentum Indicators
- RSI (Relative Strength Index) has cooled down to around 52, which means Nifty is no longer in the overbought territory. This suggests a balanced setup — the market has space to move either way depending on upcoming triggers.
- Volume Profile:
The recent dip has been accompanied by moderate volumes, indicating profit booking rather than panic selling. This distinction is important — it shows that institutional investors are rotating positions, not exiting the market entirely.
💡 Practical Trading Strategy for Thursday, 06 November 2025
Let’s break down actionable ideas for both short-term traders and positional investors based on current chart behavior.
1. For Intraday and Short-Term Traders
- Trading Bias: Slightly bearish to neutral.
- Trade Setup:
If Nifty breaks 25,550 with strong volume, one can initiate short positions for a target of 25,350 and 25,200.
This trade setup aligns with the short-term trend exhaustion and potential testing of support. - Stop Loss: Keep a tight stop loss at 25,720 (just above the 20-day EMA).
- Rationale:
When an index closes below its 20-day EMA and RSI drops toward 50, it usually signals a short-term correction phase. Shorting with discipline and quick profit booking becomes a tactical play. - Pro Tip:
Avoid chasing prices after a big fall in the first hour. Wait for a retest of resistance or a failed bounce near 25,700–25,750** before entering short trades. This reduces the risk of getting trapped in an intraday reversal.
2. For Swing and Positional Traders
- Trading Bias: Buy on dips within 25,250–25,300 range.
- Entry Zone: Accumulate if the index stabilizes around 25,300 and shows reversal candles (like a hammer or bullish engulfing).
- Targets: 25,850 / 26,100 over the next few sessions.
- Stop Loss: Close below 25,000 (100-day EMA).
- Rationale:
The broader market trend is still bullish. Buying near key supports often provides low-risk entries for positional traders who can hold for 1–3 weeks. - Pro Tip:
Avoid going all-in at once. Accumulate in tranches — one near 25,350 and another if it dips toward 25,250. This staggered approach helps average entries and control emotional reactions.
🧠 Learning Angle: How to Interpret This Phase
Many traders misread such consolidation phases as trend reversals. However, this is where smart money quietly builds new positions. When the RSI cools off and price hovers near moving averages, volatility increases but risk-adjusted entries also improve.
This phase teaches one of the golden lessons of trading:
“When markets rest, they prepare for their next big move.”
Hence, the current setup should be treated as a time correction, not a trend reversal.
📅 Conclusion: A Controlled Cool-Off Before the Next Leg
The Nifty 50 appears to be taking a healthy breather after its recent rally. Unless the index closes decisively below 25,000, the broader bull structure remains untouched.
Traders should remain flexible — short-term players can ride the corrective wave, while long-term investors should patiently add on dips.
The key for Thursday is to watch the 25,500–25,300 zone. A rebound from here can trigger a new leg toward 26,000+, while a breakdown may invite short-term volatility before stability returns.
Stay disciplined, trade with stop-loss, and remember — real profits come not from predicting the market perfectly, but from reacting intelligently to what the chart reveals.
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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