Trade setup for Dec 24: Will NIFTY50 hold the bullish momentum on Wednesday?

NIFTY50

Max call OI:

Max put OI:

(Ten strikes to ATM, 30th Dec expiry)

NIFTY50 held the gains above 26,000 on the expiry day, but failed to hit new record high levels. The index traded in a narrow range of mere 100 points and closed flat with 3 points gain on Tuesday. The US markets closed in green for the fourth consecutive session on Tuesday as technology and energy stocks led the rally. However, investors were cautious after the Q3 GDP data release, which showed 4.3% GDP growth, indicating policymakers could hold the rates steady in upcoming policy meetings.

The Asian markets traded in green on Wednesday morning, following the overnight gains in the US markets. However, the Japanese Yen strengthened to 156 against the dollar, marking its third consecutive gain after the Bank of Japan’s meeting minutes signalled further tightening of interest rates.

The GIFT NIFTY futures traded 30 points higher on Wednesday morning, indicating a positive start to the Indian markets.

On the technical front, the NIFTY50 made a doji candlestick pattern, indicating indecisive behaviour by the market participants after rallying nearly 350 points in two trading sessions. However, the bullish momentum remains intact as long as NIFTY50 trades above the 20 SMA level of 26,018, which has now become a crucial support for the index.

On the options data front, the initial open interest buildup for the 30th Dec expiry indicates 26,000 as strong support, with the highest open interest on the put side. While 26,200 calls hold the highest open interest on the upside, this indicates a near-term resistance for the index.

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Long buildup: - Coal India, Shriram Finance

Short buildup: -

Top traded futures contracts: Axis Bank, HDFC Bank

Top traded options contracts: Infy 1680 CE

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