Trade setup for Jan 21: Can NIFTY50 hold the 200 EMA support on Wednesday? check details

NIFTY50

Max call OI:25,500

Max put OI:25,000

(Ten strikes to ATM, 27 Jan expiry)

The NIFTY50 witnessed the worst selloff in several months on Tuesday as investors showed concerns over the escalating trade war-like situation between the US and the EU over the Greenland issue. Additionally, the spike in Japanese bond yields could have led to the massive unwinding of positions across the globe. While gold and silver prices continued their rally towards fresh record high levels on Tuesday.

NIFTY50 chart

On the technical charts, the NIFTY50 failed to close above the 20 and 50 EMA levels in the last few trading sessions, indicating an increased bearish trade setup for the index. However, on Tuesday, the index took support from the 200-day EMA of 25,158, which is considered to be the long-term support level for the index. Experts believe the index should hold the 200 EMA levels on a weekly closing basis to maintain the long-term bullish stance.

Options data

On the options data front, the initial buildup for the coming monthly expiry on 27th January indicates the resistance level of 25,500, with the highest open interest on the upside. On the downside, 25,000 puts held the highest open interest, indicating a crucial and psychological support for the index.

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Long buildup: -

Short buildup: Bajaj Finance, Adani Enterprises, Eternal

Top traded futures contracts: ICICI Bank, HDFC Bank

Top traded options contracts: HDFC Bank 920 CE, SBIN 1010 CE

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