Trade setup for June 18: Can NIFTY50 sustain the gains above 24,000 on Thursday?

Indian markets are set for a muted start on Thursday on mixed global market cues, as indicated by the GIFT NIFTY futures, which fell over 20 points this morning. The domestic cues remain resilient with FII’s buying regaining the momentum.

The US markets closed in red on Wednesday after the Federal Reserve kept the interest rates steady, but gave a hawkish outlook for the coming year. Consequently, the Dow Jones erased over 500 points, the S&P500 fell 1.2%, and the NASDAQ slumped the most with 1.3% losses on Wednesday.

Despite the overnight weakness in the US markets, the Asian benchmark indices in Japan and Korea made a positive start. The Korean markets opened in green near record high levels, and Japanese indices rallied nearly 2% as geopolitical risks evaporated with the signing of a deal between the US and Iran.

The crude oil prices have erased the majority of the risk premiums after the US and Iran signed the peace agreement virtually. Brent crude oil prices fell below $78 per barrel on Thursday morning, just shy of erasing all the gains made after the war started on February 28.

NIFTY50 charts

The NIFTY50 extended its upward trajectory for the fourth session in a row on Wednesday, successfully closing above the psychological 24,000 threshold. For the third straight day, the index held above the 20- and 50-day EMAs, signalling a revival in bullish momentum. Going forward, the 50-day EMA near 23,790 remains a pivotal support zone, while immediate resistance is pegged at 24,300.

NIFTY50 open interest data

The open interest data for the coming weekly expiry suggests, 24,000 level still holds the highest open interest on the put side, suggesting a strong near-term support. On the flipside, 24,000 calls and 24,500 calls hold the highest open interest with nearly 65 lakh contracts, suggesting a near-term resistance for NIFTY50.