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  4. Trade setup for 23 April: NIFTY50 confirms bullish piercing, reclaims 50-DMA

Trade setup for 23 April: NIFTY50 confirms bullish piercing, reclaims 50-DMA

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Upstox

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4 min read • Updated: April 23, 2024, 8:21 AM

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Summary

The bullish piercing pattern observed on the 19 April resulted in the NIFTY50 index closing above this formation, indicating positive momentum. However, the presence of a doji candle on the daily chart suggests that the market is in flux. Traders should keep an eye on the high and low of the doji for further directional clues.

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Open interest data for the 25 April expiry has significant call OI at 22,600 and 22,500 strikes.

Asian markets update 7 am

Indian equities are poised for a positive start, following positive cues from Wall Street and gains in major Asian indices. The GITY NIFTY (+0.1%) points to a positive opening for the NIFTY50, building on yesterday's gains. Meanwhile, Japan's Nikkei 225 is up 0.2% and Hong Kong's Hang Seng is up 1.1%.

U.S. market update

U.S. stocks closed higher on Monday, with the S&P 500 (+0.8%) and the Nasdaq Composite (+1.1%) ending a six-day losing streak on the back of a rebound in technology stocks and easing tensions in the Middle East. The gains came ahead of Q1 results from key companies such as Tesla, Meta Platforms, Alphabet (Google) and Microsoft.

NIFTY50

April Futures: 22,358 (▲1.3%)

Open Interest: 1,92,785 (▼6.7%)

After a positive start, the NIFTY50 saw some profit-booking at the beginning of the session, but maintained its morning gains throughout Monday's session. The index traded above the 22,200 level throughout the day and closed near the day's high.

The index confirmed the bullish piercing pattern formed on the 19 April and regained its important 20- and 50-day moving averages (DMAs). Towards the close, the index closed above the three-day high and above the immediate resistance level of 22,300. Going forward, immediate resistance for the index is in the 22,500-22,550 zone. On the other hand, immediate support now lies between 22,000-22,100 zone.

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Open interest data for the 25 April expiry has significant call OI at 22,600 and 22,500 strikes, while the put base is at 22,000 and 22,300 strikes. Based on the options data, the market participants are expecting NIFTY50 to trade between 21,900-22,650.

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BANK NIFTY

April Futures: 47,989 (▲0.9%)

Open Interest: 92,735 (▼15.6%)

After reclaiming both its 20 and 50 DMAs on Friday, the BANK NIFTY also started Monday's session on a positive note. Apart from some early profit-taking, the index held on to its morning gains and traded above the 47,500 level for the entire day.

Confirming the bullish piercing pattern, the BANK NIFTY also closed above the previous three day high, suggesting support based buying at lower levels. Going forward, immediate support for the index lies between 47,300 and 47,500.

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Based on the options data, the BANK NIFTY has significant call open interest (OI) at 48,000 and 49,000 strikes for 24 April expiry. Conversely, the put base is at 47,000 and 47,500 strikes which will act as a support. As per options data, the BANK NIFTY is expected to trade between 46,800 and 49,000.

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FII-DII activity

After a day’s pause, the Foreign Institutional Invetsors (FIIs) sold shares worth ₹2,915 crore. On the flip side, the Domestic Institutional Invetsors (DIIs) bought shares worth ₹3,542 crore. To track the ratio of long and short open positions of FIIs in the index, log in to https://pro.upstox.com/ ➡️F&O➡️FII-DII Activity➡️FII Derivatives

Stock scanner

Long build-up: Hindustan Copper, Voltas, BPCL and Tata Consumers

Short build-up: NTPC, Persistent Systems, Birla Soft, Coromandel International and Bosch

Under F&O ban: Biocon, Hindustan Copper, Idea, Piramal Enterprises, Steel Authority of India and Zee Entertainment

Out of F&O ban: Balrampur Chini, Bandhan Bank, Exide Industries, Vodafone Idea and Metropolis

To access a specially curated smartlist of most traded and active stocks, as well as the OI gainers and losers, simply log in: https://pro.upstox.com/ ➡️F&O➡️Options smartlist/Futures smartlist

In Futures and Options or F&O, long build-up means an increase in Open Interest (OI) along with an increase in price, and short build-up means an increase in Open Interest(OI) along with a decrease in price.

Source: Upstox and NSE.

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