The Nifty 50 rebounded after range-bound trading to rally 0.7 percent on October 26, marking a positive start to the week after losing 2.4 percent in the previous week. The recovery came ahead of the monthly F&O expiry scheduled for October 27.
The formation of a Tweezer Bottom-like pattern near 22,380, close to the 200-week EMA, raised hopes of a potential trend reversal and a recovery in bullish momentum. However, sustained buying interest above the immediate resistance zone of 22,800–22,850, near the 20-day EMA, is needed to strengthen the recovery. The next crucial resistance lies at 23,200. Until the index breaks above these levels, further consolidation and range-bound trading cannot be ruled out, with 22,400 remaining a crucial support level, according to experts.
The broader technical structure remains weak, as the index continues to trade below all key moving averages—the 20-day, 50-day, 100-day and 200-day EMAs. Meanwhile, Brent crude oil futures continued to trade above the $100-a-barrel mark.
The Nifty 50 opened lower at 22,524 and declined to an intraday low of 22,387 in the first hour of trade, close to Friday's low. The index subsequently recovered and traded within a narrow range. Buying interest strengthened after 1 pm, helping the benchmark close at 22,753, up 153 points, or 0.68 percent.
On the daily chart, the index formed a long bullish candle with a noticeable lower wick, indicating a recovery from lower levels and improving buying interest. The candlestick patterns of the last two sessions suggest the formation of a Tweezer Bottom-like pattern, although it is not a classical formation.