Trade Setup for October 29: How long will the Nifty bulls struggle to cross 26,000

After a steady rebound on Monday, the Nifty slipped into weakness amid volatility on Tuesday, the day of monthly derivatives expiry.

The index opened on a subdued note but attempted a brief recovery in early trade. Selling pressure emerged from the day's high of 26,000, dragging the market lower before a sharp late-hour rebound helped it close off the day's lows.

The Nifty recovered over 140 points from the intraday low to hold above the 25,900 mark, ending just 29 points lower at 25,936.

Within the Nifty pack, Tata Steel, JSW Steel, and SBI Life led the gainers, while Bajaj Finserv, Trent, and Coal India were among the key laggards.

Sectorally, performance was mixed — Metals, PSU Banks, and Media outperformed, while Realty, IT, and Consumer Durables saw the sharpest declines. Broader markets mirrored this tone, with both the Nifty Midcap 100 and Smallcap 100 indices closing virtually flat.

On the global front, investors now await the outcome of the US Federal Reserve's FOMC meeting on Wednesday, where a 25-basis-point rate cut is widely anticipated.

Back home, L&T, Coal India, Varun Beverages, HPCL, CG Power, and Radico Khaitan are among the key companies set to announce earnings on Wednesday.

According to Siddhartha Khemka of Motilal Oswal, markets are expected to stay firm, supported by positive global cues, macroeconomic data, and the ongoing Q2 earnings season.

On the technical front, Nagaraj Shetti of HDFC Securities said that while the near-term trend remains positive, short-term volatility persists. A sustained move above 26,100 could open the next leg of upside toward 26,400-26,500, with immediate support near 25,700.

Rupak De of LKP Securities expects momentum to pick up once the index moves decisively above 26,000, with resistance seen at 26,300 and support at 25,850.

Meanwhile, Nandish Shah of HDFC Securities said that the Nifty continues to consolidate within the 25,700-26,100 range. A breakout on either side will likely dictate the next directional move, though the bias currently remains toward an upside breakout as the index holds above key moving averages.

Similar to Nifty, Bank Nifty started Tuesday's session on a positive note but lost steam quickly, slipping to an intraday low of 57,770. However, buying interest emerged at lower levels, triggering a sharp intraday pullback, which led to index settling higher at 58,214, marking a choppy trading session.

Looking at key levels, the 58,200-58,300 zone will act as an immediate resistance for the Index. If the index manages to give a follow through move above the level of 58,300, the pullback can continue further till 58,800 level, said Sudeep Shah of SBI Securities.

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