Trade setup for May 21: Can NIFTY50 close above 23,850 on Thursday?

Owing to positive global market cues, GIFT NIFTY futures jumped 170 points on Thursday morning, indicating a gap-up opening for NIFTY50. Easing crude oil prices, treasury yields and the dollar index will be a sentiment booster for today’s trading session.

Brent crude oil prices fell over 5% on Wednesday after President Trump stated that the US was in the final stages of talks with Iran and the war could end soon. Following the development, Brent crude oil prices plunged to $103 per barrel, the lowest in two weeks.

The US markets closed with over 1% gains across the board. The NASDAQ and Dow Jones rose 1.2%, while the S&P 500 jumped 1% on Wednesday ahead of NVIDIA’s results. The company released its earnings after market hours, posting a record revenue of $81.6 billion for the January to March quarter. It provided guidance of $89.2 billion to $92.8 billion for the coming quarter.

Following the strong results from NVIDIA, the Asian markets swung back near to record high levels as demand for AI stocks remained upbeat. The Kospi index jumped 6%, while the Nikkei and Hang Seng jumped 1% each on Thursday morning.

NIFTY50

The NIFTY50 continues to trade in a narrow range of 23,400 to 23,800. The hourly charts show lower highs and higher lows, suggesting an impending big move out of this consolidation. The index faces resistance at the hourly 50 EMA of 23,588 and has support at 23,400.

NIFTY50 OI analysis

The open interest data for the upcoming weekly expiry suggests a strong concentration of open interest on the put side. The 23,500 puts hold the highest open interest, indicating strong support at these levels. On the flipside, 24,000 calls hold the highest open interest, indicating a strong resistance for NIFTY50.