Trade setup for April 24: Can NIFTY50 bounce back above 50 EMA on Friday?

Indian markets are expected to open higher amid mixed global cues. The US markets cooled off from record highs as selling in software stocks pulled the benchmark indices lower. The NASDAQ fell 0.9%, while the S&P 500 and the Dow Jones closed 0.3% lower on Thursday. Shares of software companies like IBM and ServiceNow tumbled 8% and 17%, respectively.

Meanwhile, except for Japanese indices, the other Asian markets traded in red on Friday morning, amid elevated crude oil prices. The Japanese indices hit new record high levels after higher inflation levels were reported.

GIFT NIFTY futures traded 71 points higher on Friday at 7:30 am, indicating a positive start for NIFTY50. The foreign institutional investors sold equities over ₹3,000 crore on Thursday, continuing their pessimistic stance.

On the stock-specific front, shares of Infosys and Reliance Industries will be in focus owing to their quarterly results announcement. Infosys’ Q4 revenue jumped 21% YoY at ₹8,501 crore.

On the technical charts, the NIFTY50 closed over 200 points lower for the second consecutive day, indicating increased selling pressure at higher levels. The index also failed to hold the hourly 20 EMA levels of 24,305 on a closing basis, reversing the setup from bullish to mildly bearish. Moreover, the index could try to fill the gaps created during the recent rally from lower levels before deciding the next direction.

The open interest data for the coming monthly expiry suggest 24,500 as the crucial resistance with the highest open interest on the call side. Similarly, 24,000 puts hold the highest open interest, indicating a strong support.