Trade setup for Sept 11: Can NIFTY50 close above 23,500 on Friday?

Indian benchmark indices are set for a negative opening for the fifth consecutive session on Friday, extending their weekly losses to nearly 2% this week. The GIFT NIFTY futures fell 115 points on Friday morning, indicating a gap-down opening for NIFTY50.

Crude oil prices are set to post strong weekly gains of nearly 13% this week as renewed tensions in the Middle East flare up supply concerns. Brent crude oil prices surged past the $110-per-barrel mark on Friday as US adversaries against Iran intensified.

Wall Street closed in the red on Thursday, as a higher producer price index and elevated Treasury yields aggravated bets of a rate hike in September. The Dow Jones fell over 300 points, and the S&P 500 shed 0.6% on Thursday, while the NASDAQ 100 declined 1.3%.

Taking cues from the overnight losses in the US markets and a sharp spike in crude oil and US bond yields, the Asian markets opened on Friday in the deep red. The Korean KOSPI fell nearly 3%, followed by the Japanese Nikkei at -2.45% and Hong Kong’s Hang Seng at -1.8% on Friday.

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NIFTY50 chart summary

The NIFTY50 staged a smart but short rebound on Thursday, ending over 40 points higher. The recovery helped the index form a bullish hammer candlestick pattern, showing some signs of relief for bullish traders. However, the revival can only be established if the index sustains above Thursday’s high on Friday.

NIFTY50 open interest summary

The open interest data for the coming weekly expiry indicates continued OI concentration at higher levels. The 23,500 calls witnessed strong open interest addition, indicating the nearest strong resistance level for NIFTY50. Similarly, the 24,000 call holds the highest open interest for NIFTY50, indicating a long-term resistance. On the other hand, the 23,000 puts hold the highest open interest, indicating near-term support.