Trade setup for Feb 6: Will NIFTY50 bounce back above 25,700 on Friday?

NIFTY50

Max call OI:26,000

Max put OI:25,500

(Ten strikes to ATM, 11 Feb expiry)

The NIFTY50 closed in red with over 100 points of losses on Thursday, ahead of the crucial monetary policy outcome on Friday. The markets are expected to remain flat and muted ahead of the RBI policy outcome at 10:00 am on Friday. The consensus estimates indicate a status quo in the policy meeting on Friday. Traders took note of Commerce and Industry Minister Piyush Goyal’s statement that India and the US are expected to finalise and sign a joint statement on the first tranche of the bilateral trade agreement in 4-5 days.

On the technical front, the NIFTY50 held the 20 EMA level on daily charts for the third consecutive session, indicating bulls holding the ground against the bearish pressure. The experts believe the index should hold the 20 EMA for bouncing back to 25,800 levels.

On the options data front, 26,000 calls hold the highest open interest, indicating a strong resistance for the weekly expiry. The downside looks protected at 25,500, with the respective strike price puts holding the highest open interest.

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