Expiry trade setup: Will NIFTY50 consolidate further on Tuesday or bounce back?

NIFTY50

Max call OI:25,300

Max put OI:25,200

(Ten strikes to ATM, 14 Oct expiry)

Indian benchmark indices opened lower, but later managed to recoup early losses on Monday. The NIFTY50 index traded in a narrow range of 25,200 to 25,300 on Monday, indicating indecisiveness on the direction. The global cues remain mixed on Tuesday morning, with the US markets recouping the majority of Friday’s losses. On the other hand, Asian markets trade in red on Tuesday morning.

On the technical front, the NIFTY50 index continues to face the resistance of the 25,300 levels. On the downside, 21 EMA remains a crucial support at 25,040 levels. Experts believe the index could consolidate further at current levels before deciding on the further direction.

On the options data front, the 25,300 calls hold the highest open interest for today’s expiry. On the downside, the 25,200 puts hold the highest open interest, indicating a near-term support for today’s expiry.

Bullish outlook

Traders with bullish sentiment can execute a long call strategy by buying 25,200 calls. The strategy would turn profitable after the index moves above 25,287.

Bearish outlook

Traders with a bearish outlook can execute a long put strategy by buying a put strike of 25,300. The strategy would turn profitable after the index moves below the 25,218 level.

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