Mid-day trade setup: NIFTY50 pares morning gains as selling intensifies, Can it hold budget-day low support?

Domestic equity indices continued to witness a bloodbath and were trading lower with a cut of around 1.5% in the mid-market session after the U.S. and Israel attacked Iran over the weekend. Rising crude oil prices and weak global cues weighed on the domestic sentiments.

Crude oil prices surged as Iran and Israel stepped up attacks in the Middle East, damaging tankers and disrupting shipments from the key producing region. Meanwhile, India VIX, the measure of market volatility in the domestic market, rose as much as 16.55% to 15.97. Further, the Indian rupee, which slipped 37 paise to trade at 91.45 against the US dollar, made traders all the more nervous.

The selling and volatility persisted throughout the session on account of the weekly expiry in the NIFTY50 index. The Indian markets will remain closed on Tuesday on account of the Holi Festival.

The NIFTY50 index opened over 450 points lower on Monday but recouped partial losses in the opening hours to trade only 0.7% lower. However, as the day progressed, the selling intensified, and the NIFTY50 index gave up all the morning gains to trade nearly 480 points lower at 12:30 pm in the afternoon.

Mid-day chart analysis

On hourly charts, the NIFTY50 is trading below the 20 and 50 EMA levels for the fourth consecutive day. The selling is intensified further as the NIFTY50 dropped below 200 DEMA on the daily charts, indicating bearish grip over the benchmark index. Traders and market participants eye the budget-day low as a crucial support for the near term.

Mid-day OI analysis

The mid-day open interest data change indicates a heavy OI addition on the 24,800 call strike price, indicating strong resistance at these levels for today. On the downside, the open interest concentration is visible from 24,500, 24,600 and 24,700 puts, indicating that the downside looks protected till 24,500 for Today’s expiry. The 24,500 puts hold the highest open interest for today’s expiry, with 2.3 crore contracts, and the 24,800 calls hold the highest open interest with 2.7 crore contracts short.

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