Trade setup for 30 May: NIFTY50 to find support at 22,500 on expiry?

Asian markets update 7 am

The GIFT NIFTY is down 0.2%, indicating a gap down opening for the second day in a row. Other Asian markets are also trading lower. Japan's Nikkei 225 is down 2% and Hong Kong's Hang Seng Index is down 0.2%.

U.S. market update

U.S. stocks plunged on Wednesday as bond yields rose. The Dow Jones (-1.0%) and S&P 500 (-0.7%) tumbled, overshadowing Nvidia's record high and the Nasdaq's (-0.5%) earlier rally. Investors' fears that the Federal Reserve will keep interest rates high for longer, leaving investors cautious about the future.

NIFTY50

• May Futures: 22,743 (▼0.9%)
• Open Interest: 2,77,700 (▼19.9%)

Extending its losing streak to a third day, the NIFTY 50 closed lower on Wednesday. Despite opening lower, selling pressure from Foreign Institutional Investors (FIIs) and profit taking in banking stocks kept the index under pressure throughout the day.

Our previous blog warned readers about potential selling at recent highs. We flagged the 22,750-22,800 zone, a previous all-time high, as a key area to watch. Yesterday, the NIFTY 50 dipped into this zone but failed to recover, closing below it. This signals weakness. The next critical support level sits at 22,500. A breach below this level could indicate further downside.

For today’s expiry, we have highlighted immediate support and resistance on the hourly time frame. As you can see in the chart below, the 22,800 zone will act as immediate hurdle. On the flip side, the support is visible around 22,500. Traders should monitor the price action around these levels and plan strategies accordingly.

The open interest build-up for today’s expiry has highest call base at 23,000 and 22,800 strikes. The put base on the other hand has been established at 22,500 and 22,000 strikes. The OI positioning indicates that traders are expecting NIFTY50 to trade between 22,350 and 23,000.

BANK NIFTY

• May Futures: 49,182(▼0.9%)
• Open Interest: 1,45,595 (▲59.6%)

The BANK NIFTY after a gap-down start and remained under selling pressure throughout the session, leading to profit-taking. All major constituents closed in the red, dragging the index down to close near 48,500.

Despite forming a bearish candle on the daily chart, the BANK NIFTY remains above its key 20-day and 50-day moving averages, offering some support. A critical support zone of the index lies between 48,200 and 48,000. A close below this area could signal further weakness, while a rebound from here might signal renewed buying interest.

The initial open interest build-up for the June 5 expiry remains scattered, indicating range-bound activity for the BANK NIFTY. Notably, the highest call and put open interest are concentrated at the 49,000 strike. This expiry coincides with the final phase of India's general elections, including exit polls and the final results. Due to this critical event, traders are advised to exercise caution and adhere to strict risk management practices when initiating strategies.

FII-DII activity

Stock scanner

Long build-up: Samvardhana Motherson, Hindalco Industries and Jubilant FoodWorks

Short build-up: Icici Prudential, IRCTC, Interglobe Aviation, Can Fin Homes, HDFC AMC and SBI Life

Under F&O ban: Aditya Birla Fashion and Retail (ABFRL), GMR Infra, Hindustan Copper and Idea

Out of F&O ban: Biocon and Piramal Enterprises

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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