Trade Setup For July 3: Nifty Resistance At 25,640–25,740

The NSE Nifty 50 has formed a bearish candle and on intraday charts, it is holding a lower-top formation, which is largely negative, according to analysts.

In the Nifty's current correction phase, the previous swing highs of 25,317 and 25,222 can now act as immediate support levels, according to Nandish Shah, senior derivative and technical research analyst at HDFC Securities.

On the higher side, the band of 25,640–25,740 will continue to serve as a strong hurdle for the Nifty, indicating resistance for any upward moves, Shah added.

The Nifty formed a bear candle, signalling profit booking for the third session as it failed to sustain at higher levels, according to Bajaj Broking.

Going ahead, the Nifty holding above 25,400 on a closing basis will lead to a pullback towards 25,900-26,000 levels, the brokerage added.

"After rallying nearly 5% in recent weeks, the Nifty has witnessed a mild pullback over the past few sessions, bringing it closer to the 38.20% retracement of the prior upmove, around the 25,300 mark," Rupak De, senior technical analyst at LKP Securities, said. "On the hourly chart, the index has found initial support near the 50-hour moving average."

"On the upside, immediate resistance is placed at 25,500. A sustained move above this level could pave the way for a short-term recovery, potentially pushing the index towards 25,600 or higher," De said. "Conversely, a decisive break below 25,300 may open the door for a sharper correction."

The Bank Nifty also formed a bear candle, signalling profit booking at higher levels after recent strong up move, said Bajaj Broking. "The index is currently testing the immediate support area of 56,800-57,000."

Going ahead, the Bank Nifty holding above 56,800 levels on a closing basis will lead to a pullback towards 58,000 levels in the coming sessions. Structural support is placed to the 56,000–55,500 region.

The NSE Nifty 50 ended 88 points or 0.35% lower at 25,453.40, while the BSE Sensex closed 287.60 points or 0.34% down at 83,409.69.

The Indian rupee unit depreciated by 17 paise to close at 85.71.