The stage from San Martín de Valdeiglesias to Bola del Mundo,was one for the climbers and saw Ezequiel Mosquera attack all the way up the mountain at Bola del Mundo.
Race leader Nibali gave chase, knowing that there was only forty seconds between him and the Xacobeo Galicia rider and was level with Mosquera with yards to go.
Mosquera, who has been linked with a number of teams, just made it over the finish line in front but Nibali has a lead of 41 seconds on him going into the 85km criterium stage round Madrid on Sunday afternoon.
Nicholas Roche was sixth and is seventh in the General Classification, some five minutes back on Nibali.