Trade Setup for November 7: Nifty set to end truncated week in the red

Indian equity markets resumed the truncated week on a weak note, extending losses for the second straight session. The Nifty continued its pattern of lower highs and lower lows, failing to hold the 25,500 mark amid a broad-based sell-off.

After a subdued start, the market struggled to sustain early gains and remained under pressure throughout the day.

The Nifty opened marginally lower by 4 points and attempted a brief recovery, but renewed selling at higher levels quickly erased those gains, dragging the index back into negative territory. The benchmark eventually closed 87 points lower at 25,509 on Thursday.

In an otherwise muted session, Asian Paints, Reliance Industries, and UltraTech Cement were among the top gainers in the Nifty pack. On the other hand, Grasim, Hindalco, and Adani Enterprises came under pressure and ended as the major laggards.

Among sectoral indices, only Nifty IT and Auto managed to eke out marginal gains, while Media, Metal, and Consumer Durables were the top drags. The broader market underperformed, with Nifty Midcap 100 slipping 0.95% and Nifty Smallcap 100 falling 1.40%.

Meanwhile, fintech major Pine Labs will open its ₹3,900-crore IPO on Friday. The issue, which closes on November 11, has a price band of ₹210-221 per share, valuing the company at over ₹25,300 crore. Allocation to anchor investors will take place shortly.

On the technical front, Nagaraj Shetti of HDFC Securities said the Nifty's underlying trend remains weak and the index is entering a crucial support zone around 25,400, which aligns with the previous trendline resistance. Immediate resistance is placed at 25,700.

Nilesh Jain of Centrum Broking expects short-term weakness to persist, noting that "any pullback is likely to face selling pressure." He added, "A move above 25,800 would be needed to negate the bearish setup, while immediate support lies near 25,350."

According to Rupak De of LKP Securities, the Nifty has retreated toward its previous swing high support near 25,450. "A fall below this level could further weaken the short-term trend, while holding above it may trigger a potential reversal," he said.

Nandish Shah of HDFC Securities also mentioned the 25,400-25,450 zone as critical, warning that a decisive break below it could accelerate the downside.

The Bank Nifty extended its decline for the second session and is consolidating near its previous swing support zone.

Sudeep Shah of SBI Securities said that the 20-day EMA zone of 57,400-57,300 will act as immediate support, with any sustained move below 57,300 likely leading to further correction toward 56,800. On the upside, 57,900-58,000 remains a crucial resistance area.