Trade setup for Nov 2: Can NIFTY50 defend 23,000 on Monday? GIFT NIFTY indicates gap up opening

Indian benchmark indices are expected to open on a positive note on Monday despite global market cues. Crude oil prices opened lower on Monday morning, while the overnight cues from Friday’s US market session remain negative.

The GIFT NIFTY futures surged over 160 points on Monday morning, indicating a gap-up opening for NIFTY50. A pullback in crude oil prices and the earnings reaction to Reliance Industries results will remain a key sentiment driver for Indian markets on Monday.

The US stock market closed sharply lower on Friday amid intensified selling in the tech stocks. The NASDAQ 100 fell nearly 4%, followed by the S&P 500 at 1.8% and the Dow Jones plunged over 570 points on Friday. However, the US stock market futures rose nearly 1% on Monday morning, indicating a positive trade later in the day.

Asian markets opened mixed on Monday morning, amid varying internal factors. Korean KOSPI surged 1.35% after South Korea’s exports touched $1 trillion. Meanwhile, Japanese shares plunged 1.2% on Monday morning after manufacturing data indicated a slowdown.

NIFTY 50 chart check

NIFTY50 snapped the two-month losing streak, closing 1.9% higher in October. The benchmark index also surged 2% in the previous week, closing above the important psychological resistance level of 23,000 on a weekly basis. On the hourly charts, the index managed to defend the 20 and 50 EMA and also rose above the swing high resistance trendline, indicating a shift in momentum on the short-term charts.

On the daily charts, NIFTY50 defended crucial daily 20 EMA levels on a weekly basis, indicating sustained momentum. Going forward, the 20 EMA level of 22,850 remains crucial support, and the 50 EMA level of 23,150 stands as an important resistance for the index.

After a sharp bounce back from the previous week, a range bound trade between 22,850 to 23,200 remains a highly probable scenario for the index. Similarly, a closing above or below these important threshold levels could help decide the further direction of the index.

NIFTY50 open interest data

The open interest buildup for tomorrow’s weekly expiry indicates improved support on the downside. The 22,700 and 22,800 puts hold over 1 crore contracts in the open interest, indicating strong support. Similarly, 23,500 calls hold the highest open interest, indicating strong resistance on the upside.