Trade setup for Jan 19: Will NIFTY50 hold 25,600 levels on Monday amid global sell off?

NIFTY50

Max call OI:26,000

Max put OI:25,500

(Ten strikes to ATM, 20 Jan expiry)

NIFTY50 managed to close in green in the previous week after Trump threatened with new tariffs on India over the buying of Russian Oil. Market participants are expected to witness similar volatility and choppiness in the coming week as well amid an escalating trade war-like situation between the US and the EU over the Greenland issue. Following the new 10% tariffs by the US on the eight EU nations, the US market futures opened by over 1% lower on Monday morning, indicating weakness in the global markets.

The Asian markets also traded in red across the board with Japanese indices falling over 1% on Monday morning. The GIFT NIFTY futures traded 145 points lower, indicating a weak start for NIFTY50 on Monday.

On the technical front, the NIFTY50 held the crucial support of the weekly 20 EMA level of 25,649 on a closing basis. Experts believe the index will remain under 26,000 in the trade amid weak global cues, making it a crucial resistance. While the 26,640 levels of the 20 EMA will remain a crucial support on a weekly closing basis.

On the options data front, the 26,000 calls hold the highest open interest, indicating a strong resistance. On the downside, the 25,500 puts hold the highest open interest, indicating a near-term support for the index for tomorrow’s expiry.

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Long buildup: - Tech Mahindra, Wipro

Short buildup: Eternal, Jio Financial

Top traded futures contracts: Infy, Federal Bank

Top traded options contracts: Infy 1720 CE

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