Trade Setup For Oct 27: Will Nifty Hit 22,800 Resistance Level As Brent Cools Below $115?

The Nifty 50 snapped its four-session losing streak on Monday, gaining 153 points to close at 22,753, as buying interest emerged at lower levels. However, the index faces a key hurdle at 22,800, with market participants watching whether it can sustain a move above this level and extend its recovery towards 23,000.

Meanwhile, crude oil prices eased after surging to an almost six-month high towards the end of last week. Brent crude slipped below $115 a barrel, offering some relief to markets amid persistent concerns over potential supply disruptions following continued attacks on Saudi Arabia.

Market participants remain cautious as geopolitical developments, crude oil movements and global policy decisions continue to influence sentiment.

“Indian stock markets are expected to trade sideways until greater clarity emerges on global cues and policy decisions. Markets are expected to sustain at current levels, however, continued attacks on Saudi Arabia have kept concerns over potential supply disruptions elevated,” said Siddhartha Khemka, head of research, wealth management, at Motilal Oswal Financial Services.

The Nifty's recovery above 22,700 has improved near-term sentiment, but a decisive breakout above 22,800 remains necessary to strengthen the bullish case.

READ | Bajaj Auto Q2 Preview: Profit Seen Rising 27%; Can Export Momentum Offset Higher Raw Material Costs?

“However, the 22,800 level continues to act as a major resistance, and the index needs to decisively break and sustain above this zone to extend its recovery towards the psychological 23,000 mark,” said Ponmudi R, CEO of Enrich Money. On the downside, 22,500 is expected to act as immediate support. A decisive break below this level could undermine the recovery and drag the index towards the 22,400-22,300 range.

For the next trading session, investors will watch whether buying momentum can carry the benchmark above 22,800 or whether resistance triggers renewed selling pressure.

Bank Nifty Outlook

The Bank Nifty found support near its previous swing low and staged a recovery, closing at 54,366, up 0.15% for the session. On the daily chart, the index formed a hammer-like candle, suggesting buying interest at lower levels. Sudeep Shah, head of technical and derivatives research at SBI Securities, said the 53,800-53,700 zone would be a crucial support area, as the previous swing low is located around these levels.

On the upside, the banking index could move towards 55,000 initially, followed by 55,600 in the near term.