Trade setup for Aug 7: Can NIFTY50 breakout from the consolidation range? Check details

GIFT NIFTY futures plunged over 100 points on Friday morning amid weak global market cues, indicating a gap-down opening for NIFTY50. The elevated crude oil prices will continue to act as a sentiment dampner for Indian equities in Friday’s trading session.

The Brent crude oil futures jumped 4.5% overnight and extended the gains on Friday morning after media reports claimed that Iran targeted vessels near Qeshm island. The attack comes amid the ongoing talks between the US and Iran brokered by Oman over peace deal.

The US markets ended in red on Thursday as investors amid renewed tensions in the Middle East. Additonally, the elevated crude oil prices brought back the fears of rate hike in the upcoming policy meeting next month. The Dow Jones shed 464 points and the S&P 500 and NASDAQ fell as much as 0.4% on Thursday.

Taking cues from overnight weakness in the global markets, the Asian markets opened in red across the board. The KOSPI index plunged over 4%, followed by Nikkei and Hang Seng at nearly 2% loss on Friday morning.

NIFTY50 chart check

The NIFTY50 index closed marginally lower on Thursday, indicating a rangebound trading activity. The index traded in minute trade range of 40 points between 24,636 to 24,677. However, on the hourly charts, the index managed to close above 20 and 50 EMA levels, keeping the bullish momentum intact in the short term.

On the daily charts, the index continued to post doji candlestick pattern, indicating indecision on the direction of the index. Additionally, it also signalled a time correction period for NIFTY50 as the index faces strong resistance at 24,775 and support near 24,400.

NIFTY50 open interest summary

The latest open interest data indicates continued rangebound activity as the highest open interest on the upside remains at 24,700 CE and the highest open interest on the downside remains at 24,600 PE.