Trade setup for Feb 25: Will NIFTY50 bounce back above 25,500 on Wednesday?

NIFTY50

Max call OI:25,500

Max put OI:25,000

(Ten strikes to ATM, 02 March expiry)

The NIFTY50 index witnessed a sharp sell-off on the monthly expiry day of Feb 24 after IT stocks plunged nearly 6% across the board. The index also closed below the crucial psychological support level of 25,500. However, the GIFT NIFTY futures indicate a sharp gap-up opening for NIFTY50 on Wednesday. Investors across the globe will reassess the risks of AI taking over, as the technology and software stocks witnessed a sharp rebound from lower levels in the US. The bounce back is also expected to be visible in the Indian IT stocks on Wednesday.

On the technical charts, the NIFTY50 managed to close above 25,400 levels, which also holds a crucial trendline support from the budget day high. The RSI levels indicate a mildly bearish tone for Wednesday. Experts believe the index should close above the 25,500 levels on Wednesday to revive the bullish momentum.

On the options data front, the initial build-up for the 02nd March weekly expiry suggests that the 25,500 calls hold the highest open interest, indicating a strong resistance. On the flipside, the 25,000 puts hold the highest open interest, indicating strong support.

Stock Scanner Long buildup: -NTPC, JSW Steel

Short buildup: Tech Mahindra, HCL Technologies

Top traded futures contracts: HDFC Bank

Top traded options contracts: HDFC Bank 880 CE

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