Expiry trade setup: Will NIFTY50 hold the support or bounce back from current levels?

NIFTY50

Max call OI:25,000

Max put OI:24,600

(Ten strikes to ATM, 07 Aug Expiry)

GIFT NIFTY futures indicate a 66-point gap down opening for NIFTY50 on Thursday amid additional tariff imposition by President Trump. The President signed an executive order of imposing an additional 25% tariffs on India amid the Russian energy supply.

Despite the weak setup, the NIFTY50 continues to hold the crucial support levels of 24,500 on a closing basis. On the technical charts, the index is now on the verge of a negative crossover with 21 EMA crossing 50 EMA from above, indicating a bearish outlook for the index. However, on the positive side, on the weekly charts, the index has held the support of 21-EMA levels for the second consecutive week, indicating a medium-term neutral outlook after falling for 5 consecutive weeks.

On the options data front, the 24,600 puts continue to hold the highest open interest, with strong OI addition at the 24,500 puts level. On the upside, the 25,000 calls hold the highest open interest, indicating strong resistance for today’s expiry.

Bullish outlook Traders with bullish sentiment can execute a long call strategy by buying 24,550 calls. The strategy would turn profitable after the index moves above 24,639.

Bearish outlook Traders with a bearish outlook can execute a long put strategy by buying a put strike of 24,600. The strategy would turn profitable after the index moves below the 25,515 level.