Trade setup for Sept 2: Can NIFTY50 defend 24,000 on Wednesday? GIFT NIFTY indicates muted opening

The global market cues indicate another weak day of trade for Indian markets on Wednesday. Soaring crude oil prices and elevated global bond yields are expected to dominate investor sentiment throughout the day.

Brent crude oil prices hit the $97 per barrel mark early morning on Wednesday as hostilities between the US and Iran increased. United States Military resumed attacks on Iran in the Strait of Hormuz region.

Consequently, the US markets closed in deep red on Tuesday after elevated crude oil prices brought back the fears of sticky inflation. The long-dated 10Y yields approached the 4.78% mark, suggesting higher-for-longer interest rates. The Dow Jones and the S&P 500 fell 0.7%, and the NASDAQ 100 dropped 1.29%, the most among the US benchmark indices.

Taking cues from the overnight losses in the Asian markets, the Japanese Nikkei fell over 2%, the Korean KOSPI dipped 3%, and the Hong Kong Hang Seng also dipped over 1% on Wednesday morning.

The GIFT NIFTY futures fell over 24 points on Wednesday morning, suggesting a weak opening for NIFTY50 on Wednesday.

NIFTY50 chart summary

On the daily charts, NIFTY50 closed below the trendline support on Tuesday, indicating fresh weakness. However, the index managed to close above the 24,000 psychological benchmark, giving some hope for bulls to revive the momentum. In the medium term, the 24,000 level remains a crucial support, and 24,200 remains a near-term hurdle for traders.

NIFTY50 open interest summary

The initial buildup for the coming weekly expiry suggests a broad range of trade between 23,500 and 24,200. The 23,500 puts hold the highest open interest, indicating strong support on the downside. Similarly, the 24,200 calls hold the highest open interest, indicating near-term resistance. In addition, 24,200 to 24,500 calls hold strong open interest concentration, indicating limited upside potential above 24,200 levels on Wednesday.