Trade setup for Oct 15: Can NIFTY50 defend 22,600 amid weak global market sentiment?

The GIFT NIFTY futures traded 8 points lower on Thursday morning, indicating a flat opening for the NIFTY50. The pullback in the crude oil price after a five day rally, could ease selling pressure on the Indian markets.

Crude oil prices staged a small technical pullback after five days of gains, plunging 1.7% on Thursday morning. The Brent crude futures now trade at $104 per barrel, after surging to $106 per barrel mark earlier this week. Meanwhile, the geopolitical situation remains grim in the Middle East after Houthi rebels attacked Saudi Airport.

The US markets closed in the deep red on Wednesday, after September CPI inflation came above expectations. The S&P 500 and NASDAQ 100 fell 1.1% and 1.8%, while the Dow Jones fell 48 points.

Taking cues from the overnight rout in the US tech stocks, the Korean and Japanese markets also plunged in the deep red amid selling pressure in the tech stocks. The Korean KOSPI crashed 7%, while the Nikkei fell 4.3% on Thursday morning. Elevated borrowing costs across the globe raise concerns over the AI theme, which is financed by heavy debt.

NIFTY50 chart check

After staging a strong bounce back on Tuesday, NIFTY50 scaled back 100 points on Wednesday amid broader weakness in the markets. However, on the hourly charts, the index managed to defend the 20 and 50 EMA levels, indicating sustained momentum, despite some pullback from the rally.

On the daily charts, the index approaches the daily 20 EMA level of 22,851, which continues to remain a key hurdle for the medium-term momentum to reverse. The downside looks protected in the 22,300-22,400 zone, beyond which the bearishness could intensify.

NIFTY50 open interest data

The open interest data for the coming weekly expiry indicates skewness towards the call side, with 23,000 calls holding over 1 crore contracts, indicating strong resistance for the index. Similarly, on the downside, the 22,500 puts held the highest open interest, with relatively lower contract size, indicating near-term support.