Trade setup for May 19: Can NIFTY50 cross 23,800 on expiry day?

Indian benchmark indices are expected to open higher amid mixed global market cues. The US markets closed mixed, and the Asian markets opened largely lower. However, positive cues from the cooling dollar index and US bond yields could alleviate some concerns among Indian investors. In addition, strong buying by foreign and domestic institutional investors could boost sentiment in Tuesday’s trade.

The US markets ended on a mixed note on Monday as investors assessed the evolving situation in the Middle East. The Dow Jones rose 0.32, while the S&P 500 and NASDAQ closed 0.1% and 0.5% lower, respectively.

Brent crude oil prices hovered near $110 per barrel as the situation in the Middle East continued to remain tense after President Trump said he called off a planned strike on Iran. Crude oil prices jumped nearly 10% in the previous week and started the week with high volatility.

Asian market cues remain mixed with Japanese and Korean indices opening in red, except for Hong Kong, which rose 0.3%. The Japanese markets gave up early gains to trade 0.2% lower after its GDP grew by 0.5% in the previous quarter. The Korean benchmark indices opened nearly 3% lower amid profit booking by investors at higher levels.

NIFTY50 chart check

The NIFTY50 closed flat with a 6-point gain after recouping over 340 points from the intraday low levels. The index managed to defend the 23,250–23,300 support zone as highlighted previously. The chart structure remains neutral with a positive bias if the index manages to close above the 23,700 levels. However, a closing below 23,300 would invalidate the positive structure and indicate further weakness.

NIFTY OI analysis

The options data for the weekly expiry on Tuesday indicated sharp open interest addition on the put side, indicating major support for the index at lower levels. The 23,400 put holds the highest open interest on the downside, indicating a key level of protection. On the upside, 24,000 calls hold the highest open interest, indicating a strong resistance for today’s expiry.