Trade setup for July 21: Can NIFTY50 defend 24,200 on expiry day?

Indian markets are set for negative start for the second consecutive day this week. Taking cues from the overnight losses in the US markets, the GIFT NIFTY futures were trading more than 130 points lower on Tuesday at 7:45 am, indicating a gap down opening for the NIFTY50.

Brent crude oil prices remained steady near $88 per barrel after touching a five-week-high of $91 per barrel. Oil prices remain elevated amid the continuing exchange of strikes between the US and Iran.

The US stock markets closed in the red, paring all the intraday gains made on Monday. The Dow Jones fell over 300 points, the S&P 500 closed 0.2% lower and the NASDAQ 100 closed flat, erasing 400 points from the intraday high.

Asian markets bounced back on Tuesday morning, despite tensions in the Middle East. The Korean KOSPI rose 3%, while Japan's Nikkei rose over 1,000 points.

NIFTY50 chart

The NIFTY50 opened with a gap down on Monday, erasing most of the gains made on Friday. The index closed nearly 100 points lower, after recouping some intraday losses. Despite the weakness, the index managed to close above the hourly 20-day and 50-day EMAs, keeping hopes alive for bulls to regain the strength.

On the daily charts, the index defended the 20-day EMA level for the seventh consecutive session, indicating sustained buying strength near these levels. Additionally, the index also defended the 24,200 level on Monday, which continues to remain a key support zone for NIFTY50.

NIFTY50 open interest analysis

The open interest for today’s expiry data suggests, the index continues to maintain strong support near 24,200 levels with highest open interest on the put side. On the upside, 24,500 calls hold the highest open interest, indicating a strong resistance zone for NIFTY50. Meanwhile, 24,300 to 24,500 calls witnessed strong open interest concentration, indicating resistance at higher levels.