Trade Setup for October 28: 26,000 remains a congestion zone for Nifty ahead of monthly expiry

After a brief pause on Friday, the Nifty resumed its upward trajectory on Monday. The index opened with an upside gap of nearly 50 points, buoyed by strong global cues, and extended gains in early trade.

The Nifty built on those early advances to finish the session on a strong note. After a brief range-bound phase in the middle of the day, the index closed near the day's highs, regaining Friday's losses and crossing the 26,000 mark intra-day. The Nifty rose 170 points to end at 25,966.

Large-cap stocks such as Reliance Industries, Bharti Airtel, SBI, and HDFC Bank provided most of the support, while Kotak Mahindra Bank, BEL, and Bajaj Finance came under selling pressure and ended among the major laggards.

Reliance Industries shares gained over 2% after the company announced a joint venture with Meta Platforms to develop enterprise artificial intelligence (AI) solutions. Kotak Bank was the top Nifty loser, falling 2% after posting in-line Q2 earnings.

Vodafone Idea shares surged up to 10% after the Supreme Court said there was no reason the Centre could not reconsider the issue of additional AGR dues, offering a major relief to the telecom operator.

Barring Nifty Media and Pharma, all sectoral indices ended in the green, with PSU Bank, Oil & Gas, and Realty leading the rally.

Broader markets mirrored the benchmark’s strength, as the Nifty Midcap 100 rose 0.93% and the Smallcap 100 gained 0.82%. The Midcap index also broke out on the daily chart to close at a fresh 52-week high.

The domestic market tracked gains in global equities after softer-than-expected US inflation data (3.0% YoY in Sep'25 vs 3.1% expected) bolstered expectations of a Fed rate cut in the upcoming policy meet.

Optimism around progress in US-China trade negotiations also lifted sentiment, with both nations reportedly close to signing a new trade deal.

On the macro front, investors will watch India's Industrial Production and US consumer confidence data due on Tuesday. With the Q2 earnings season in full swing, markets are likely to see sector- and stock-specific action in response to results and management commentary.

Key companies set to announce earnings on Tuesday include TVS Motor, Tata Capital, Jindal Steel, and CAMS.

Siddhartha Khemka of Motilal Oswal expects the market to witness a gradual uptrend, led by strong global cues, renewed FII inflows, and expectations of healthy corporate earnings.

Dalal Street is also gearing up for another week of billion-dollar IPOs led by Lenskart and MTR-parent Orkla India. Together, the three IPOs opening for subscription this week aim to raise nearly ₹9,500 crore.

Technical view

Nagaraj Shetti of HDFC Securities said the underlying trend of the market remains positive, with the Nifty likely to advance towards the 26,300-26,400 resistance zone in the near term. Immediate support is placed around 25,700.

According to Rupak De of LKP Securities, the Nifty started strong and remained largely range-bound through the day ahead of the F&O expiry. He believes sentiment remains upbeat as the index sustains above the breakout point, with dips likely to be bought into.

De added that a decisive move above 26,000 could trigger a rally towards 26,500 in the short term, while support remains firm at 25,700.

Nandish Shah of HDFC Securities said that the Nifty has consistently closed above its 5-DEMA over the past several sessions, signaling a clear bullish trend. A close above the recent swing high of 26,104 would negate bearish implications and pave the way for a move toward the all-time high of 26,277 or higher, he said.