Trade setup for July 9: Will NIFTY50 bounce back on Thursday? Check details

Taking cues from Asian markets and mixed US market performance, GIFT NIFTY futures surged 100 points at 7:30 am, indicating a positive start for the NIFTY50 on Thursday. However, elevated crude oil prices and currency pressure will continue to weigh on sentiments in Thursday’s trade.

Brent crude oil prices climbed past $80 per barrel, rallying 12% over two sessions as the US-Iran ceasefire collapsed. Following President Trump's declaration that the truce had ended, the US conducted airstrikes on Iranian targets for the second day in a row.

Wall Street extended its decline on Wednesday as deteriorating geopolitical cues weighed on investor sentiment. The Dow Jones plunged more than 500 points or 1%, while the S&P 500 finished 0.2% lower. Meanwhile, the tech-heavy NASDAQ 100 staged a recovery, wiping out early losses to conclude the session with a 50-point gain.

Asian markets shrugged off the renewed geopolitical tensions in the Middle East as Japanese and Korean markets rallied on Thursday morning. The Japanese Nikkei jumped 1,400 points or 2% and the Korean KOSPI soared 173 points or 2.4%, lifted by a rally in tech stocks.

NIFTY50 chart check

The NIFTY50 witnessed a sharp pullback on Wednesday amid weak external factors. The index erased all the gains made in the last week and this week. The index closed below the hourly 20 and 50 EMA levels and showed signs of potential negative crossover.

On the daily charts, the index closed below the 20 and 50 EMA levels after defending it for 16 consecutive trading sessions. The current pullback completed the possibility of support retest, highlighted in Wednesday's newsletter. If the index continued to follow the weak trend, it could potentially fill the gap created on 15th June till 23,645 zone.

NIFTY50 open interest analysis

The sharp pullback on the NIFTY50 turned the open interest data for coming weekly expiry in the opposite direction. The 24,000, 24,100, 24,200 and 24,300 CE witnessed strong open interest addition, suggesting strong resistance at higher levels. On the flipside, 23,500 puts hold the highest open interest, indicating a strong support at these levels.