Expiry trade setup: Options data indicate broad range of 24,500 to 25,000 for expiry; Check details

Asian markets opened lower across the board with sharp losses in Japanese indices. The Japanese Nikkei index fell 410 points , Hong Kong’s Hang Seng fell 0.48% and Korean indices traded flat-to-negative. The US-China trade deal brought some relief and led to rally from lower levels. However, investors remain cautious about economic and corporate outlook for Asian economies.

US markets

The US markets closed mixed on Wednesday as Dow Jones slipped 0.21% and NASDAQ and S&P 500 closed with gains of 0.7% and 0.1% respectively. Nvidia climbed 3% following reports of AI chip shipments to Saudi Arabia, and AMD jumped 4% after unveiling a $6 billion share buyback plan.

NIFTY50

Max call OI: 25,000

Max put OI: 24,500

(Ten strikes to ATM, 15 May expiry)

NIFTY50 consolidated further on Wednesday after posting an inside bar candle on Tuesday. Despite the consolidating range, the broader market strength remained in favour of bulls. Experts believe 25,000 remains key resistance for the near term, with downside capped at 24,500 NIFTY50 crossed the 20 and 50 EMA on the 15-minute chart, indicating positive bias for expiry day trading. It also formed a descending triangle pattern on the 15-minute chart. If the index breaks out of the lower highs trendline of the triangle, it could lead to a rally towards 25,000. Similarly, a breakdown on the trendline support of 24600 could take the index towards 24,400.

On the options front, 25,000 levels hold the highest open interest on the call side, indicating strong resistance for today’s expiry. On the downside, 24,500 puts hold the highest open interest, indicating support for today's expiry.

Bullish outlook

Traders with bullish sentiment can execute a long call strategy by buying 24,650 calls. The strategy would turn profitable after the index moves above 23,740.

Bearish outlook

Traders with a bearish outlook can execute a long put strategy by buying a put strike of 24,700. The strategy would turn profitable after the index moves below the 24,590 level.

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