Trade setup for Aug 4: Can NIFTY50 sustain the gains above 24,700 on weekly expiry?

Indian benchmark indices are expected to open on a flat note amid mixed global market cues. The GIFT NIFTY futures hovered near flat on Tuesday morning as Asian markets pared early gains and US markets closed in the green overnight.

The Brent crude oil futures hovered near $84 per barrel on Tuesday morning as the US and Iran plan to engage in diplomatic talks and finalise the deal with peace talks. President Trump said his proposal for talks represents a final opportunity for Iran and the reopening of the Strait of Hormuz.

The US markets ended in the green across the board as benchmark indices soared as much as 2% on Monday. The NASDAQ 100 closed 1.7% higher, led by a rally in chip stocks. The S&P 500 and Dow Jones soared 1.4% and 1.3%, respectively.

On the flipside, Asian markets hovered around flat lines after Japanese and Korean markets pared early morning gains. The Nikkei and KOSPI traded 0.1% higher, while the Hang Seng index fell 0.5% on Tuesday morning.

NIFTY50 chart summary

NIFTY50 touched five-month high levels on Monday after soaring over 200 points on Monday. The last-hour spike took the index above 24,700. On the daily charts, the index continued to maintain above 200 EMA levels, reversing the momentum to bullish for the long term from neutral earlier. Going forward, 24,200-24,300 remains a crucial support zone for NIFTY50, and 25,000 remains the next psychological resistance level.

NIFTY50 open interest

The last hour spike in the NIFTY50 led to sharp volatility in open interest. The 24,600 calls and puts hold the highest open interest for today’s expiry, indicating indecision on direction for NIFTY50 on today’s expiry. However, 24,500 and 24,600 puts witnessed strong open interest addition in Monday’s trading session, indicating downside protection till 24,500 for today’s weekly expiry.