Trade setup for Sep 18: Can NIFTY50 close above 23,300 on Friday?

Indian benchmark indices are expected to open on a flat-to-positive note on Friday, extending a small pullback from Thursday. Crude oil prices staged a pullback on Thursday, falling 1.4%.

Brent crude oil prices fell below $103 per barrel on Thursday after Saudi Arabia shifted some crude exports through the Strait of Hormuz after the closure of a key pipeline.

Meanwhile, the US markets staged a smart recovery on Thursday after investors reassessed the risks in equities after a 25-bps rate hike by the Federal Reserve on Wednesday. The Dow Jones surged 319 points, while the S&P 500 and NASDAQ 100 soared 1.1% and 1.4%, respectively.

Taking cues from the overnight gains in the US markets, the Asian markets surged across the board as tech stocks pulled the indices higher. The Bank of Japan hiked its interest rates to 1.25%, at a more than 3-decade high level. The Nikkei and KOSPI surged nearly 2% on Friday morning.

NIFTY50 chart summary

The benchmark index is headed for a weekly loss for the second consecutive week. The index staged an extended recovery on Thursday, with a 23-point gain. On the hourly charts, the index attempted to close above the 20 EMA, but failed to do so in the closing hours.

On the daily charts, the RSI continues to remain below 30, indicating an oversold level. However, in the absence of follow-up buying at higher levels, the index continued to trade below 23,300, with the support zone of 23,100-23,200.

Open interest summary

The open interest data for the upcoming weekly expiry indicates 23,000 as crucial support, with the highest open interest on the put side. On the other hand, 23,500 calls held the highest open interest on the upside, indicating strong resistance for the coming weekly expiry.