Trade setup for June 5: Can NIFTY50 give a weekly close above 23,500 on Friday?

Indian markets are expected to open in green despite mixed global market cues ahead of the RBI’s policy decision, which will be announced at 10:00 am.

The crude oil prices plunged 2% on Thursday amid the hopes that a diplomatic solution could emerge from the US-Iran war. Brent crude oil futures steadied near the $ 95-per-barrel level on Friday morning.

The US markets ended mixed on Thursday, with the Dow Jones hitting fresh record highs by soaring over 900 points. Meanwhile, NASDAQ fell 0.09% after tech stocks took a beat led by Broadcom shares. The S&P 500 rose 0.4% before the close.

The Asian markets followed the cues from the rout in tech stocks in the US and opened in the red on Friday morning. The Nikkei fell over 1400 points, and Korea’s KOSPI plunged over 5% on Friday morning.

GIFT NIFTY futures traded 70 points higher on Friday morning, indicating a positive start for NIFTY50. The buoyancy in the domestic markets is primarily due to the RBI’s policy decision, to be announced at 10:00 am today.

Chart check

The NIFTY50 opened over 100 points lower on Thursday, but recouped all the losses to close in the green on Thursday. The 10-point gain over the previous day’s high confirms a bullish hammer candlestick pattern, helping to maintain the neutral view on the index. The upside remains protected at 20 EMA, and 23,300 is a crucial support for the NIFTY50.

Open interest data

The open interest data for NIFTY50 indicates strong put concentration at 23,000 to 23,300 price levels, indicating a strong support zone for NIFTY50 at 23,300 levels. On the flipside, the 23,500 calls hold the highest open interest, indicating a near-term resistance for NIFTY50.