Trade setup for 29 April: 22,500 remains a hurdle for NIFTY50

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 is up 0.3%, while the Hong Kong's Hang Seng index is up 0.5%. Markets in Japan are closed for a public holiday.

U.S. market update

U.S. stocks rallied on Friday, boosted by optimism over Alphabet's (Google) and Microsoft's earnings, leading to a rally in tech companies. This positive sentiment came despite the fact that the core Personal Consumption Expenditures (PCE) index - Fed’s key inflation measure rose 2.8% YoY in March. The reading was higher than the Street's estimate of 2.7%.

The S&P 500 rose 1% to 5,099 and the Nasdaq Composite jumped 2% to 15,927. The Dow Jones Industrial Average rose 0.4% to 38,239.

NIFTY50

May Futures: 22,556 (▼0.3%)

Open Interest: 4,15,978 (▼9.0%)

After a positive start, the NIFTY50 index gave up all its gains and fell back below the 22,500 level. The index traded in negative territory throughout the session and closed lower on Friday.

On the daily chart, the NIFTY50 formed a bullish engulfing candle on the 25 April. However, the index erased all of Thursday's gains and failed to close above the key 22,500 level. This pullback takes the NIFTY50 back into the 22,500-22,000 range, with the 22,300 level acting as the immediate support.

The open interest (OI) built up for the 2 May expiry has a maximum call base at the 22,500 and 22,600 strikes. On the other hand, put OI has accumulated at the 22,000 and 22,400 strikes. Based on the options data, traders expect the NIFTY50 to trade between 21,900 and 22,900.

BANK NIFTY

May Futures: 48,379 (▼0.3%)

Open Interest: 1,16,420 (▼6.0%)

The BANK NIFTY broke its five-day winning streak and failed to sustain the positive momentum from Thursday's session. Much like the NIFTY50, the banking index failed to confirm and extend the bullish engulfing pattern formed during Thursday's session.

On a weekly basis, the index gained 1% but has formed a doji candle. This means that investors are currently indecisive with immediate support between 46,900-47,000 while resistance remains at 49,000.

Options data for the May 30 expiry shows significant call open interest at 48,500 and maximum put open interest at the 48,000 strike. Based on the open interest, traders expect the BANK NIFTY to trade between 47,700 and 48,900.

FII-DII activity

The Foreign Institutional Investors remained net sellers during the entire week ending 26 April, selling shares worth ₹3,408 crore on Friday. On the other hand, Domestic Institutional Investors remained net buyers during the same period and bought shares worth ₹4,356 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: GMR Infrastructure, Container Corporation of India, Dixon Technologies, Biocon and SUN TV

Short build-up: L&T Technology Services, Bajaj Finance, Bajaj Finserv and L&T Finance

Under F&O ban: Idea

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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