Expiry trade setup: Can NIFTY50 bounce back after weak opening on Tuesday? Check details

NIFTY50

Max call OI:26,000

Max put OI:25,500

(Ten strikes to ATM, 24 Feb expiry)

The benchmark index managed to close in green and start the week on a positive note. The NIFTY50 gained over 141 points amid a volatile and a range bound day. The cues for Tuesday on a monthly expiry day remain weak as the US markets plunged into deep red as the AI-led stock rout deepened. Following the rout in software stocks, the Indian IT stocks will remain in focus again on Tuesday after the NIFTY IT index fell 1.4% on Monday.

The GIFT NIFTY futures traded 129 points lower on Tuesday morning, indicating a weak opening for the NIFTY50.

On the technical charts, the index sustained above the 20 and 50 EMA levels on the hourly charts and also closed above the key moving averages on the daily charts, indicating renewed bullish momentum in the index. However, with a weak opening, the index should close above the moving averages in the early hours of the trading session to keep the bullish momentum intact throughout the day.

On the options data front, the 25,500 puts hold the highest open interest, indicating a strong support for today’s expiry. On the flip side, the 26,000 calls continued to hold the highest open interest, indicating a strong resistance for the NIFTY50 on Tuesday.

Expiry outlook

Bullish outlook: Traders with bullish sentiment can execute a long call strategy by buying 25,700 calls. The strategy would turn profitable after the index moves above 25,781.

Bearish outlook: Traders with a bearish outlook can execute a long put strategy by buying a put strike of 25,800. The strategy would turn profitable after the index moves below the 25,658 level.

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