Trade setup for June 3: NIFTY50 defends 23,300 support; consolidation ahead?

Indian benchmark indices are expected to open on a muted note, despite positive global market cues. The benchmark NIFTY50 index is expected to open 30 points lower, as indicated by GIFT NIFTY. Elevated crude oil prices and rising geopolitical uncertainty remains key overhang for Indian markets.

Brent crude oil prices bounced back to $98 per barrel as stalled US-Iran talks kept the geopolitical risk premium in oil prices elevated. Iran’s refusal to halt nuclear enrichment and its strict stance on the transfer of enriched uranium remain the biggest hurdles for the deal to progress.

The rally in AI and related stocks offset the geopolitical concerns in the US markets as they closed at fresh record highs on Tuesday. The Dow Jones rallied 0.45%, followed by minimal gains in the S&P 500 and NASDAQ at 0.1% and 0.03%, respectively.

Asian markets opened mixed on Wednesday morning, following the modest overnight gains in the US markets. The Japanese Nikkei rose over 1,400 points or 2%. Meanwhile, Hong Kong’s Hang Seng traded in the red. The Korean markets are closed on Wednesday due to local elections.

NIFTY50 chart check

The NIFTY50 bounced back from the previous month’s support levels on Tuesday. The index formed an open-low same candle formation at 23,229, indicating a sharp reversal from oversold levels, with strong buying. Going forward, the 23,200 level will remain a crucial support, and the 20 EMA level will be the crucial resistance.

NIFTY50 options data

The initial buildup for the coming weekly expiry suggests that the 23,300 level could emerge as a crucial support level for NIFTY50 with the highest open interest on the put side. On the upside, 24,000 calls hold the highest open interest, with OI concentration at 23,700, 23800 levels, indicating upside protection for the index.