Trade Setup for December 3: Nifty analysts advise buying the dips but selling the rallies

The Nifty 50 index spent another session in a sluggish and largely negative zone as broad-based weakness and nervousness ahead of the Reserve Bank of India's December 5 policy decision weighed on sentiment. By Meghna Sen The Nifty 50 slipped for the third straight session, closing 143 points lower at 26,032 as sentiment turned bearish after the index broke below its recent consolidation band and fell under both the 5 and 10-day EMAs. Selling pressure dominated the weekly expiry, though the index staged a mild recovery after 3 pm from the psychologically crucial 26,000 level. Despite the steady drift through the session, Nifty managed to end just above the 26,000 mark, down 0.55%. The market opened with a gap down, mirroring weak global cues and extending the cautious tone from the previous day. Broader weakness across sectors and nervousness ahead of the RBI's December 5 policy outcome further dampened sentiment. It was a broad-based decline, marking the market's third straight day of losses. More than 35 Nifty stocks ended in the red, with heavyweights such as Reliance Industries, HDFC Bank and ICICI Bank among the top drags. Most sectors closed lower, led by private banks and financial services, which fell 0.7% and 0.8%. In contrast, the PSU Bank index gained 0.5%, extending its recovery for a second day. Other rate-sensitive sectors, including autos, realty and consumer durables, witnessed profit-taking amid a cautious setup. Monthly auto volumes for November came in ahead of expectations, supported by strong post-festive wholesales, normalised dealer inventory, and festive order backlogs. Retail demand trends from January 2026 will be the key metric to watch, though underlying sentiment remains healthy. In the macro backdrop, investors will track commentary from the US Federal Reserve and JOLTS job openings tonight, followed by US non-farm payrolls and India's Services PMI tomorrow. The rupee weakened further to a new record low of 89.92, pressured by persistent foreign outflows and elevated crude prices. Analysts expect markets to stay in consolidation mode, influenced by domestic and global triggers. The US jobs report is likely to shape expectations around the Fed's policy next week, while rate-sensitive pockets will remain in focus ahead of the RBI's decision on Friday. According to Vinay Rajani of HDFC Securities, a decisive break down below 25,968 could trigger further downside toward 25,842, while resistance on any rebound remains around the 26,300 mark. For Nifty, major resistance lies at 26,325, and any bounce below this level may trigger profit-taking, according to Hrishikesh Yedve of Asit C. Mehta Investment Intermediates. Key support is seen at 25,840. Traders are advised to buy near support zones and book profits near resistance. Osho Krishan of Angel One said the 26,000-25,950 band should offer immediate support, with a stronger base around 25,850. Resistance is placed at 26,200 and then 26,325. He added that dips are likely to be bought into, keeping the broader structure bullish. Rupak De of LKP Securities said that a rising trendline on the hourly chart provides near-term support. A break below this trendline could push the index toward 25,900, while resistance at 26,150 remains key. He expects a bearish-to-sideways bias in the coming sessions. Bank Nifty also opened weak and remained under pressure through the day, closing at 59,274. Sudeep Shah of SBI Securities said the 20-day EMA zone of 58,950-58,850 will act as crucial support, while the 59,600-59,700 band is a key hurdle. A sustained move above 59,700 could trigger an upmove toward 60,200. Note To Readers Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions. Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!