Trade setup for June 16: Will NIFTY50 sustain the gains and close above 24,000?

Indian markets are ready for a positive start on Tuesday after rallying over 3% in two consecutive sessions. The global market cues remain positive with a cautious bias as global investors now shift their focus towards the policy meet outcome at the Federal Reserve. Meanwhile, the Bank of Japan raised its policy rates by 25 bps to tame its rising inflation. Following the mixed global market cues, GIFT NIFTY futures traded 50 points higher, suggesting a mild-positive start for NIFTY50 on Tuesday.

Brent crude oil prices retreated further to around $83 per barrel as investors await further details of the reopening of the Strait of Hormuz. The interim agreement is expected to be signed on Friday, June 19, in Switzerland.

US markets continued their rally on Monday, with tech stocks soaring nearly 10%. The NASDAQ jumped 3.07%, the S&P 500 rallied 1.65%, and the Dow Jones rose 0.92%. Investors now look forward to the Federal Reserve’s policy announcement for further cues.

Meanwhile, Asian markets opened mixed on Tuesday morning as Japanese indices traded in the red after the Bank of Japan raised its interest rates by 25 bps. On the other hand, Korean markets continued to rally, taking cues from the overnight gains in the US tech stocks. The KOSPI jumped 1.6% on Tuesday morning. Meanwhile, the Hang Seng was trading 1.3% lower.

NIFTY50 charts

The NIFTY50 jumped for the second consecutive session on Monday as geopolitical tensions eased. The index rallied over 400 points intraday, but failed to sustain above 24,000. However, the index closed above the 50 EMA and now indicates a bullish crossover of the 20 EMA crossing the 50 EMA from below. 24,000 remains crucial near-term resistance, and the 50 EMA level of 23,650 remains a crucial support for the index.

NIFTY50 OI analysis

On the options data front, 24,000 calls hold the highest open interest, indicating a strong resistance for today’s expiry. However, any gains above 24,000 could lead to a short-covering rally in NIFTY50 till 24,200-24,300 levels. On the flipside, 23,500 holds the highest open interest, indicating a near-term support for NIFTY50.