Trade setup for May 4: Can NIFTY50 defend 24,000 on Monday?

The Indian benchmark indices are expected to open in green with a gain of over 100 to 200 points on Monday morning, owing to positive global market conditions. The benchmark indices witnessed a strong pullback from lower levels on Thursday. The NIFTY50 closed just shy of the psychological benchmark of 24,000, recouping the majority of the intraday losses. The buoyancy is expected to prevail in Monday’s trading session as indicated by GIFT NIFTY.

Brent crude oil prices traded near $107 per barrel on Monday morning, after President Trump announced ‘Project Freedom’, which is aimed at assisting stuck civilian vessels from all the major countries to pass through the Strait of Hormuz. At the same time, the US has responded to Iran with a 14-point diplomatic proposal, which is currently being evaluated by Iran.

The tech-led rally in the US markets continued on Friday, with the NASDAQ hitting fresh record highs. Meanwhile, the S&P 500 and Dow Jones slipped from intraday highs to close flat to negative on Friday. However, the benchmark indices closed nearly 1% higher for the previous week.

Asian market cues remain upbeat with the Korean KOSPI soaring over 3% and Hong Kong’s Hang Seng rising over 1% on Monday morning. The Korean index hit another record high level amid renewed buying interest in semiconductor-related stocks and easing Middle East supply-chain concerns.

Chart check

The NIFTY50 witnessed high volatility on Friday amid intense buying at lower levels. The index hit an intraday low of 23,796, suggesting a potential downtrend. However, buying in the mid-day session pulled the indices back to an intraday high of 24,087. On the daily chart, the index managed to close above the 20 EMA level of 23,978 but below the 50 EMA level of 24,187. The index made a dragonfly doji candlestick pattern on the daily charts, suggesting a reversal of bearish momentum.

NIFTY50 OI Analysis

The open interest data for tomorrow’s expiry indicates that 24,000 to 24,500 remains a crucial resistance zone for the NIFTY50, with high open interest concentration at all levels. The 24,500 calls hold the highest open interest, indicating a near-term major resistance level.

On the flipside, the 24,000 puts hold the highest interest, followed by 23,800, which remains the key support level for the coming weekly expiry on May 05.