Trade setup: Can NIFTY50 bounce back above 23,300 on Tuesday?

Indian benchmark indices are expected to open in the red amid mixed global market cues. The geopolitical tensions in the Middle East eased after Iran and Israel agreed to halt strikes. Meanwhile, tech stocks in the US posted a strong bounce back on Monday. The GIFT NIFTY futures traded 41 points lower on Tuesday morning, suggesting a flat opening for NIFTY50 on Tuesday.

Brent crude oil prices steadied near $94 per barrel, reversing the previous day’s major gains as Iran and Israel agreed to halt strikes against each other. President Trump urged both sides to de-escalate and said talks with Tehran are continuing.

The US markets closed mixed, with tech stocks posting a strong rebound after a sharp sell-off on Friday. The Dow Jones fell 0.2% or 80 points, while the S&P 500 rose 0.3%. Meanwhile, the tech-heavy NASDAQ closed 0.9% higher, led by chip stocks like Micron, NVIDIA, AMD and Intel, which rallied up to 11% on Monday.

Asian markets opened in the green, partially reversing the previous day’s losses amid easing geopolitical tensions in the Middle East. Additionally, overnight gains in the US tech stocks boosted the sentiment for chip makers and tech stocks in Japan, South Korea and Taiwan. The Nikkei jumped 1%, and KOSPI traded 3.7% higher on Tuesday morning.

NIFTY50 chart

The NIFTY50 index opened more than 200 points lower but later recovered partially during the mid-market session. However, the closing-hour selling again pulled back the index near its crucial support levels. The index failed to close above the 23,150 support. However, it managed to defend the psychological support level of 23,000. Meanwhile, the upside remains capped near the 23,600 level.

NIFTY50 open interest analysis

The open interest data for today’s expiry indicates a strong support at 23,000 levels, with the highest open interest on the put side for the strike price. On the upside, the 23,500 level holds the highest open interest, indicating a strong resistance.