Trade setup for Dec 19: Will NIFTY50 break out of consolidation on Friday?

NIFTY50

Max call OI:26,000

Max put OI:25,500

(Ten strikes to ATM, 23rd Dec expiry)

The NIFTY50 closed unchanged on Thursday as global market cues remained weak ahead of the CPI inflation print announced later in the day. The US CPI came in lower than expected at 2.7%. Following the weak inflation growth, the US benchmark indices bounced back on Thursday up to 1.5% gains. The Nasdaq ended with a 1.4% gain, followed by the S&P 500 at 0.8%, and the Dow Jones rose 66 points.

Tracking the positive US markets, the Asian markets traded in green across the board. The Japanese markets rose the most with gains of 1% on Friday morning, ahead of the crucial Bank of Japan’s policy outcome. The central bank is widely expected to increase the policy rate by 25 bps to 0.7%.

On the technical charts, the NIFTY50 bounced back from the intraday low levels, taking support at the 50 EMA levels of 25,767. The 50 EMA may continue to remain as a crucial support in the medium term for NIFTY50. The lower highs’ trendline may act as a strong resistance for the index.

On the options data front, 26,000 calls continued to hold the highest open interest, indicating a strong resistance for NIFTY50. On the other hand, the 25,500 puts hold the highest open interest, indicating a strong support for the index.

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Short buildup: - Sun Pharma

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