Trade setup for Aug 18: Can NIFTY50 defend 50 EMA on Tuesday? Check details

Indian benchmark indices are set to open in the red on Tuesday amid weak global market cues. The GIFT NIFTY futures fell over 55 points on Tuesday morning, suggesting a weak opening for NIFTY50.

Brent crude oil prices surged over 2.5% overnight, hitting the $91 per barrel mark after prospects of an interim peace deal faded. President Trump said he was not interested in extending the interim peace deal.

The US stock markets ended red after elevated crude oil prices soured investor sentiment. The Dow Jones fell over 220 points, followed by 0.1% losses in the S&P 500 and the NASDAQ 100.

Meanwhile, the Asian markets opened mixed as Japanese, Chinese and the Hong Kong indices opened in the red. While Korean benchmark indices extended their rally by rising over 1.4% on Tuesday morning.

Elevated crude oil prices brought back the prospects of rising inflation and subsequent rate hike fears. The US 10Y Treasury yields surged back above 4.7% near 19-month high levels. Additionally, gold prices remained firm above the $4,400 per ounce mark as real yields fell (nominal yield minus inflation expectations)

NIFTY50 chart summary

The NIFTY50 remains in consolidation mode, falling nearly 80 points during Monday’s choppy trading session. For five sessions running, the index closed below its 20 and 50 EMAs within a tight 24,250–24,400 range, reflecting a persistent lack of buying interest.

Daily charts show the index struggled to reclaim both the 200 EMA and the vital 24,400 support. While the 50 EMA at 24,193 provides immediate support, expect range-bound activity to persist through the expiry session unless a decisive breakout occurs on either end of the current spectrum.

NIFTY50 open interest summary

The open interest data ahead of today’s expiry revealed a trading range of 24,300 to 24,500. The 24,300 puts hold the highest open interest, indicating near-term support. On the flip side, 24,500 calls hold the highest open interest, suggesting near-term resistance.