Trade setup for Dec 11: NIFTY50 broke the 20-EMA support, what next?

NIFTY50

Max call OI:26,000

Max put OI:25,500

(Ten strikes to ATM, 16 Dec expiry)

NIFTY50 & SENSEX ended lower on Wednesday, as investors awaited fresh cues from the ongoing negotiations on the India-US bilateral trade deal. After making a cautious start, soon indices turned positive, as traders took some support after the Asian Development Bank upgraded India’s growth projection to 7.2% for the fiscal year ending March 2026.

The GIFT NIFTY futures indicate a positive start for NIFTY50 on Thursday, taking cues from buoyant global markets. The Federal Reserve cut interest rates by 25 basis points, indicating a slow and gradual path of rate cuts in the coming year. Additionally, Chairman Jerome Powell expressed confidence in the economy, which boosted investor confidence. Consequently, the Dow Jones closed 1.1% higher, followed by the S&P 500 at 0.3% and NASDAQ at 0.4%.

The daily charts of NIFTY50 show increased weakness as the index failed to close above the 20-EMA levels of 25,990. Additionally, the NIFTY50 also broke the crucial higher-lows trend line from the October lows, indicating increased bearishness in the index. On the upside, the 26,000 remains a crucial resistance for the near term.

On the options data front, the 25,500 puts held the highest open interest for the 16 Dec expiry, indicating a strong support for the expiry. On the upside, 26,000 calls held the highest open interest, indicating strong resistance.

Stock Scanner

Long buildup: -

Short buildup: - Indigo

Top traded futures contracts: Indigo, Dixon

Top traded options contracts: Reliance 1580 CE, Reliance 1570 CE

F&O securities under ban: Bandhan Bank, Samman Capital,

F&O securities out of the ban: Kaynes Technologies