Trade setup for June 2: Can NIFTY50 hold 23,000 support on expiry day?

Indian benchmark indices are expected to open in the red, tracking weak global market cues. The peace deal between Iran and the US remains in limbo as both nations engage in a stalemate. Meanwhile, investors remain focused on the outcome of the policy meeting starting tomorrow.

Brent crude oil futures rose over 3% on Monday evening after the stalemate over the US-Iran peace deal continued. On Monday, Iranian media reported that all communications with the US were suspended and no further talks will happen. However, President Trump said that negotiations with Iran are ongoing and a deal could be reached within the next week.

The US markets closed with modest gains as investors reassessed the situation in the Middle East. The Dow Jones closed almost flat with 0.09% gains, while the S&P 500 rose 0.26% and the NASDAQ advanced 0.42%. Tech stocks continued their rally as shares of Micron (+6.6%), NVIDIA (+6.3%), Oracle (+9.9%) and IBM (+7.6%) were top gainers.

The Asian markets opened in red on Tuesday morning as renewed tensions in the Middle East prompted investors to book profits at record levels. The Japanese Nikkei fell 1.8%, while the Korean Kospi tumbled 2.2%.

GIFT NIFTY futures were down 176 points or 0.75% at 8:00 am, indicating a gap-down start for the NIFTY50 on Tuesday, tracking weak global market cues.

NIFTY50 charts

On the daily chart, the NIFTY50 index has slipped back to the 23,350–23,400 support zone, which also coincides with the 50% Fibonacci retracement zone.

As long as NIFTY50 stays below the 23,800–24,000 zone, upside may remain capped. On the downside, a decisive close below 23,350 could drag the index towards the next support zone of 23,100–23,000, which is close to the 61.8% retracement level.

NIFTY50 open interest analysis

The open interest concentration on the call side remains high from 23,500 to 23,900 levels, indicating strong upside resistance for NIFTY50. On the flipside, the downside remains protected at 23,300 and 23,300 levels as these strike price puts hold the highest open interest on the downside.

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