Trade setup for Aug 27: Can NIFTY50 defend 24,200 on Thursday? Key things to know

GIFT NIFTY futures fell over 30 points on Thursday morning, indicating a muted start for NIFTY50. The volatility in crude oil prices is expected to drive sentiment for Indian markets.

The US stock markets edged lower on Wednesday after core PCE inflation suggested stickiness at 3.7%, unchanged over the previous month. The Dow Jones snapped its winning streak to close over 100 points lower, while the S&P 500 and the NASDAQ 100 closed on flat lines.

On the other hand, NVIDIA posted better-than-expected earnings for Q2 with revenue of $ 96 billion. The company raised its guidance for its Q3 revenue to $108 billion.

Taking cues from strong results from NVIDIA and its outlook, the chip stocks in Korea, Taiwan, and Japan surged on Thursday morning. Kospi surged over 2%, followed by Taiwan Weighted at +1% and Japan’s Nikkei at 0.2%. Meanwhile, Hong Kong’s Hang Seng fell over 0.3%, underperforming its closest peers.

Crude oil prices extended their decline for the fourth consecutive day as diplomatic efforts between Iran and Oman to normalise Strait of Hormuz operations abated investor worries. Brent crude oil prices hovered near $85 per barrel, and WTI crude oil prices slipped below $82 per barrel on Thursday.

NIFTY50 chart summary

The index pared all the gains made on Tuesday as profit booking emerged at higher levels. On the daily charts, the index negated the bullish engulfing pattern created on Tuesday, reversing the momentum to mildly bearish. The weakness would strengthen if the index closes below 24,115, which is Tuesday’s intraday low. Before that, the 50 EMA level of 24,176 remains a crucial near-term support with limited upside till 24,300.

NIFTY50 open interest summary

Wednesday’s trading volatility shifted the open interest concentration on the higher side. The 24,300, 24,400 and 24,500 calls witnessed strong open interest addition. On the flip side, 24,200 puts held the highest open interest, indicating near-term support. Although the 24,200 puts witnessed open interest unwinding, indicating weak support for the index at current levels.

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