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Trade Setup for August 5: Nifty's strong close raises hopes for a meaningful pullback rallyThe Nifty is expected to remain range-bound, and traders are advised adopt a buy-on-dips and sell-on-rise approach, accumulating near the support zone and booking profits near resistance, analysts say.By Meghna Sen   August 4, 2025, 6:55:53 PM IST (Updated)3 Min ReadAfter last week's sharp sell-off amid ongoing tariff concerns, bulls finally found some respite to kick off the new trading week. The Indian equity market started the week on a strong footing, as suggested by positive cues from Gift Nifty.

The Nifty 50 index witnessed a smart bounce-back on Monday, registering a relief rally in the first session of the week. The index opened on a positive note and began to climb steadily soon after.

Intraday momentum continued through the mid and late parts of the session, with the Nifty eventually closing at the day's high. Prices showed resilience throughout, with no major signs of weakness.

By the end of Monday's session, the Nifty had gained 157 points to close at 24,722.

Hero MotoCorp, Tata Steel and Adani Ports led the charge among the Nifty's top performers. Conversely, it proved to be a particularly tough session for Power Grid, HDFC Bank, and ONGC, which ended as the major losers within the Nifty pack.

A clear sign of the market's improved sentiment was the widespread buying interest across sectors. Barring Nifty FMCG, which ended marginally in the red, all other sectoral indices closed the day in the green.

The gains were particularly strong in Nifty Metal, Realty, Auto, and IT, which all ended as major gainers, indicating a broad-based return of confidence among investors.

The positive momentum was even more pronounced in the broader market. Both the Nifty Midcap 100 Index and the Nifty Smallcap Index significantly outperformed the benchmark. The Nifty Midcap 100 surged a strong 1.40%, while the Nifty Smallcap Index gained 1.27%.

Going ahead, markets will focus on important earnings announcements scheduled for Tuesday, including from Adani Ports, Bharti Airtel, Berger Paints India, Bharti Hexacom, Britannia Industries, Castrol India, and KPI Green Energy.

What does the Nifty 50 charts indicate?

Nandish Shah of HDFC Securities said the Nifty has been consistently finding support at its 100-day DEMA, and today's strong close has raised hopes for a meaningful pullback rally. "The recent swing low of 24,535 is now considered a support level, while the 50-day DEMA, located near 24900, is expected to offer resistance."

According to Rajesh Bhosale of Angel One, the 24,600-24,500 zone remains a sacrosanct support area, having held through multiple pullbacks since May. As long as this zone is protected, bulls will continue to fancy a comeback.

On the flip side, he said that the market isn't entirely out of the woods yet, with overhead resistance likely to emerge at regular intervals. In the near term, the 24,850-24,950 zone is seen as immediate resistance.

Given this backdrop, Nifty is likely to remain range-bound, and traders should adopt a buy-on-dips and sell-on-rise approach, accumulating near the support zone and booking profits near resistance, Bhosale added.

After the formation of new lower bottom on Monday at 24,535, the Nifty is expected to form a new lower top around 24,850-24,900 levels in the short term, which could be a sell on rise opportunity, said Nagaraj Shetti of HDFC Securities.Continue ReadingNote To ReadersDisclaimer: 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.First Published: Aug 4, 2025 6:55 PM ISTCheck 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!TagsBSE SensexNifty 50share market todayTrade setup