Trade setup for Aug 11: Can NIFTY50 break the range of 24,400-24,600 on expiry day?

GIFT NIFTY futures traded 15 points lower, indicating a flat opening for NIFTY50 on Tuesday. The mixed global market cues and rise in crude oil prices will continue to weigh on investor sentiment throughout the trading session.

Crude oil prices surged on Monday, climbing over 6.6% to reclaim the $87 per barrel handle and erasing all losses from the preceding week. Market participants maintain a cautious stance as they monitor the developments in the ongoing diplomatic talks between the US and Iran.

Wall Street indices finished with marginal losses in a relatively quiet session. While the NASDAQ 100 led the decline with a 0.34% drop, the Dow Jones and S&P 500 slipped 0.11% and 0.05% respectively. The combination of rising treasury yields and elevated energy costs continues to weigh on investor sentiment.

Meanwhile, Asian markets opened mixed on Tuesday, due to weak overnight sentiment in the US markets. Hong Kong’s Hang Seng Index opened in the red, with a 0.3% loss, and the KOSPI traded in the green with minor gains of 0.3%. Japanese markets remain closed today on account of a national public holiday.

NIFTY50 chart summary

NIFTY50 continued its consolidation on Monday amid a lack of fresh cues for Indian markets. The index managed to close above the 20 and 50 EMAs, keeping the bullish sentiment alive. However, the index has formed a symmetrical triangle pattern on hourly charts, indicating a big move after breaking out of the swing highs and swing low trendlines.

On the daily charts, the index has managed to defend the 200 EMA for six consecutive days, extending its time correction period. The index also formed a doji candlestick pattern, suggesting range-bound trading activity in today’s session.

NIFTY50 open interest data

Monday’s open interest data buildup indicates a range-bound trade on today’s weekly expiry. 24,600 calls hold the highest open interest data, indicating strong resistance for today’s expiry. On the downside, 24,500 puts hold the highest open interest, suggesting strong resistance. A breakout on either side would lead to a major move on the upside or downside due to expiry day volatility.