Trade setup for Oct 30: Can NIFTY50 reclaim 23,000 on Friday? GIFT NIFTY futures indicate a muted start

Indian benchmark indices are expected to open on a muted note, amid weak overnight cues from the US and sharp selloff in the Asian markets on Friday morning. The GIFT NIFTY futures also fell 40 points, indicating a negative start for NIFTY50.

Crude oil prices have surged back to four-month high levels on Thursday after media reports indicate that the US could resume military strikes against Iran. Brent crude oil prices traded near $113 per barrel, despite the looming risk of supply disruption from the region.

The US markets closed in the red, pulled lower by a selloff in the tech stocks after megacap earnings continued to disappoint. The NASDAQ 100 fell 1.3%, while Dow Jones and S&P 500 fell 0.3% on Thursday.

The Asian markets extended the overnight pessimism on Friday morning as the tech selloff intensified. The KOSPI plunged 5.2%, and Nikkei fell -2%. At the same time, Hong Kong’s Hang Seng index surged over 1%.

NIFTY50 chart check

NIFTY50 staged a strong recovery from lower levels, closing 1% higher and near the 23,000 threshold levels on Thursday. On the hourly charts, the index closed above the 20 and 50 EMA levels, delivering a positive crossover of the 20 EMA crossing the 50 EMA from below.

Similarly, on the daily charts, the index closed above the 20 EMA once again this month, indicating a reversal in momentum for the near term. However, the index now faces crucial resistance at the swing high trendline resistance at 23,000.

A decisive close above this threshold in Friday’s trading session will drive the next rally towards 23,200-23,400 levels. On the flip side, the support remains intact at 23,800 levels for the index.

NIFTY50 open interest summary

The open interest data for the upcoming weekly expiry on November 3 indicates strong support emerging at the lower levels. The 22,500 to 22,900 puts witnessed strong open interest addition, indicating downside support at regular intervals. The 22,500 puts held the highest open interest, indicating strong support. On the other hand, 23,000 and 23,400 calls held the highest open interest, indicating near-term resistance for the index.