Expiry trade setup: Will NIFTY50 bounce back on Tuesday or fall again?

NIFTY50

Max call OI:25,000

Max put OI:24,600

(Ten strikes to ATM, 30 Sep expiry)

The NIFTY50 opened nearly 100 points higher on Monday, but later pared all the gains to close 20 points lower. The index continues to face selling pressure at higher levels owing to weak global cues and no major breakthrough in the India-US trade deal negotiations. In addition, market participants await, RBI’s policy decision on Wednesday.

On the technical front, the technical setup remains the same for Tuesday as the index remains under pressure. According to the experts, the swing low support trend line of 24,500 is the next crucial support for the index on the downside. Experts believe a monthly closing above 25,000 could help in regaining momentum for October.

On the options data front, the 25,000 calls hold the highest open interest, indicating a strong resistance for today’s expiry. On the downside, the 24,600 holds the highest open interest, indicating a crucial support for today’s expiry.

Bullish outlook

Traders with bullish sentiment can execute a long call strategy by buying 24,600 calls. The strategy would turn profitable after the index moves above 24,716.

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 24,646 level.

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