Trade setup for Oct 29: Can NIFTY50 reclaim 22,800 levels on Thursday? GIFT NIFTY indicates muted start

GIFT NIFTY futures traded 26 points lower on Thursday morning, indicating a muted start for NIFTY50. Q2 earnings reaction will likely dominate the sentiment on Thursday’s trading activity.

Brent crude oil prices hovered near $114 per barrel on Thursday morning, as investors and oil traders continued to assess the diplomatic efforts to resolve the standoff in the Middle East region.

The US stock markets closed in green with minor gains after the Federal Reserve kept interest rates unchanged at 3.75%-4.00%. However, the NASDAQ 100 futures fell over 1% on Thursday morning after Alphabet Inc. reported weaker-than-expected earnings on Wednesday overnight.

The Asian markets traded mixed on Thursday morning as profit booking emerged in Korean markets. The Korean KOSPI fell over 2% after soaring 6% in the previous session. While the Japanese indices extended their gains for the third consecutive day at 0.2%.

NIFTY50 chart check

NIFTY50 closed in red, down 50 points on Wednesday, after recouping the lost ground in the intraday session. The index bounced back over 200 points from the intraday low, bringing some hope for bulls to regain momentum. However, the absence of buying at intraday high levels kept the index below 22,700 levels.

On the hourly charts, the index closed near the 20 and 50 EMA, indicating a range-bound trade for the short term between 22,500 and 22,775. The inactivity at higher levels also negated the positive crossover for Wednesday.

On the daily charts, the index made a doji candlestick pattern, indicating indecision over the direction. Going forward, the index could trade in the range of 22,500 to 22,800 and 23,000 on the higher side; a breakout or breakdown from this range will help in ascertaining the direction.

NIFTY50 open interest summary

The open interest data for the coming weekly expiry indicates a trading range of 22,500 to 23,500. The 23,000 calls held the highest open interest, indicating strong resistance on the upside. On the downside, the 22,500 puts held the highest open interest, indicating major support for the coming weekly expiry.

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