Trade Setup for August 1: Nifty bulls not cowing down but 24,950 remains a hurdle

After a two-session pullback, the Nifty resumed its downward trajectory, triggered primarily by US President Donald Trump’s announcement of a 25% tariff on Indian exports. The July expiry session was marked by heightened volatility.The index opened with a steep gap-down of 213 points but staged a sharp intraday recovery, bouncing back 321 points from its morning low of 24,635. However, the rebound was short-lived. Post 1:45 pm, the Nifty reversed direction again, shedding over 200 points from the day’s high of 24,956.
The Nifty ended the session below the 24,800 mark after briefly crossing above 24,900, ultimately closing with a loss of 86 points at 24,768.
Market breadth remained weak, with 39 of the 50 Nifty stocks closing in the red. Adani Enterprises and Tata Steel were the top losers, while Hindustan Unilever (HUL) emerged as the top gainer, rising over 3% post a steady Q1 performance.ALSO READ | August F&O Setup: Here’s why low FII longs are a boon for the Nifty 50

Maruti Suzuki India also reported a stable June-quarter performance, led by exports. The stock ended flat.

Among top gainers in today’s decline were HUL, Jio Financial Services, and JSW Steel. On the flip side, Adani Enterprises, Tata Steel, and Sun Pharma were the key laggards.Broader markets mirrored the weakness, with both the Nifty Midcap 100 and Smallcap 100 indices falling around 1%, underperforming the benchmark.

Sectorally, the weakness was broad-based. Barring the Nifty FMCG and Media indices, all other sectoral indices ended in the red, with Oil & Gas, Pharma, and Metal witnessing the steepest declines.

Nagaraj Shetti of HDFC Securities said the short-term trend for Nifty remains positive but highly volatile. A decisive move above 24,950 could open the gates for an upside towards 25,250. Immediate support is seen at 24,630.

Rupak De of LKP Securities mentioned that while the index recovered sharply after the gap-down opening, it failed to sustain higher levels and continues to trade below its 50-EMA, reinforcing a bearish trend.

“The RSI is in a bearish crossover. However, a hidden positive divergence has emerged over the last 2–3 days, hinting at a possible bullish reversal. A move above 25,000 could validate this setup. Until then, the Nifty is likely to remain range-bound between 24,600 and 25,000,” he added.

Nandish Shah of HDFC Securities said that despite the weak opening, the index held above its previous swing low of 24,598, which remains crucial short-term support. On the upside, the 50-day EMA near 24,930 continues to pose strong resistance.