Expiry trade setup: Will NIFTY50 sustain the breakout above 25,700 on Monday?

NIFTY50

Max call OI:26,000

Max put OI:25,500

( Ten strikes to ATM, 20 Oct expiry)

NIFTY50 has successfully continued to march ahead on Friday with another 1.6% gain. The index heavyweights like Reliance Industries, HDFC Bank, and ICICI Bank reported their Q2 results over the weekend. Reliance Industries reported an 18% YoY jump in net profit, while HDFC Bank and ICICI Bank reported an 11% and 5% YoY jump in net profit.

On the technical front, the index has successfully given a breakout above the crucial swing high trendline on weekly charts, indicating a new bullish momentum ahead of Diwali in the Indian markets. For the index to cross above 26,000 levels, it should continue to hold the gains during the current week as well.

On the options data front, the 26,000 calls hold the highest open interest, indicating a strong resistance zone for today’s expiry. On the other hand, 25,500 puts hold the highest open interest, indicating a strong support zone for today’s expiry.

The India ViX index jumped nearly 7% on Friday, indicating heightened volatility in the Indian markets ahead.

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 25,789.

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 25,676 level.

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