Trade setup for Dec 17: NIFTY50 in consolidation mode, will it breakout or breakdown on Wednesday?

NIFTY50

Max call OI:26,000

Max put OI:25,500

(Ten strikes to ATM, 23rd Dec expiry)

The NIFTY closed in deep red on Tuesday below the psychological benchmark of 26,000. The global market cues continue to remain weak as US markets closed in red for the second consecutive session this week. Additionally, investors await the outcome of India-US trade negotiations, which are currently underway. The GIFT NIFTY futures traded flat with a points gain on Wednesday morning, indicating a mildly positive start for the index.

On the technical front, the daily chart indicates a consolidation phase with no clear direction for the NIFTY50. The index closed below 20-EMA again, indicating short-term bearishness. The 26,000 levels continue to hold near-term resistance, while the 50-EMA level of 25,971 may act as a crucial support for the index.

On the options data front, the 25,500 puts hold the highest open interest for the coming weekly expiry, indicating a crucial support. While 26,000 calls witnessed a strong open interest buildup, indicating a strong resistance for the 23rd Dec expiry.

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Long buildup: - Titan

Short buildup: - Axis Bank, Eternal

Top traded futures contracts: Vedl, Axis Bank

Top traded options contracts: HSDC Bank 990 PE, Infy 1640 CE

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

F&O securities out of the ban: Kaynes Technologies