Trade setup for May 22: Can NIFTY50 give a positive weekly close on Friday?

Indian benchmark indices are expected to open higher amid positive global market cues. The US bond yields cooled off to 4.5%, and the dollar index remained steady near 99, easing off some tensions over domestic currency.

Crude oil prices are set for a weekly decline as investors remain hopeful about easing tensions in West Asia. US Secretary of State Marco Rubio said there are some encouraging signs of potential agreement with Iran, following which Brent crude oil prices remained steady near $109 per barrel.

The US markets continued their record run as a potential agreement with Iran boosted investor sentiment. The Dow Jones made a record high closing, soaring 0.55%, followed by NASDAQ and the S&P 500, which gained 0.2% and 0.1%, respectively.

The Asian markets opened in the green across the board as optimism over cooling geopolitical tensions bolstered investor confidence. Renewed optimism around tech stocks boosted the rally in Japanese markets as the benchmark index gained over 1.7% while the Korean and Hong Kong’s benchmark index jumped up to 0.5%.

NIFTY50

The NIFTY50 index opened with strong gains on Thursday but lost momentum by mid-day and closed almost flat. The index failed to break out of the consolidation range of 23,400 to 23,850. The chart structure remains unchanged, as the index closed below the lower-high trendline resistance and the 20 EMA and 50 EMA, indicating weak buying power at the higher levels.

The open interest data for the coming weekly expiry indicates 24,000 as a strong resistance level with the highest open interest on the call side. Additionally, 23,800 calls also witnessed a strong open interest addition, indicating a near-term resistance. On the flipside, the 23,500 puts hold the highest open interest, indicating a near-term support for the NIFTY50.