The night of 26 to 27 October 1942 had seen the Highland, South African, and New Zealand divisions successfully cleaning out enemy positions south of Kidney Ridge. At this point, the enemy was able to keep a solid front facing the east. The Australian historian characterizes Rommel's plans after he had arrived back as a series of "forlon-hope attacks". Montgomery was happy with that, as he preferred to have the enemy attack his forces rather than the other way around.
With attacks near Kidney Ridge and Trig 29, Rommel assumed that the British were trying to attack north to the coast road. He responded by having the 21st Armored Division and "part of Ariete" to a position to be ready to counterattack. Rommel also sent artillery from the south up to the north. The 90th Light Division had been sitting at Daba, waiting for orders. Rommel ordered them and the 361st Battle Group to "the line south of Sidi el Rahman". This was during the night of 26 to 27 October. Rommel sent the 159th Battle Group to a position near Trig 29. He sent the 200th Battle Group to a position "between Ghazal and the coast".
27 October saw "strong counterattacks" ordered by Rommel. The 90th Light Division was to attack Trig 29 from a location to the north. The 21st Armored Division would attack "Kidney Ridge from the south". They would have infantry to assist the attack. The infantry would be from 15th Armored Division and the 164th Division. The 155th Battle Group was sent to Trig 29, but they could only get to within 500 yards west of Trig 29. British artillery fire halted the infantry advance, so Rommel ordered them to dig in and hold the ground they sat on. The 155th Battle Group "were dug in north-west of Trig 29". "The 361st Regimental Group", along with the 90th Light Division, were sitting on the rail line "south of Abd el Rahman". This is based on the account in Vol.III of the Australian Official History.