Trade setup for Sept 8: Can NIFTY50 defend 23,600 on expiry day? GIFT NIFTY indicates a weak start

GIFT NIFTY futures indicate another weak start for NIFTY50 on Tuesday as elevated crude oil prices continue to dampen investor sentiment. The US stock markets were closed on Monday on account of Labor Day. Meanwhile, the US stock market futures traded in the green on Tuesday, indicating a positive start for US equities on Tuesday.

A slew of economic data releases this week will drive the stance for the Federal Reserve’s policy decision. The jobless claims and inflation data scheduled to be released on Thursday and Friday are the key monitorables for global investors this week.

Meanwhile, the Asian stock markets opened in the green across Japan and Korea, while Hong Kong markets opened in the red. The KOSPI hit 3-week high levels amid renewed optimism in the technology stocks.

Brent crude oil futures remained steady near $97 per barrel on Tuesday as tensions remained elevated in the Middle East region. Meanwhile, an agreement between Oman and Iran to control the Strait of Hormuz reached its final stages, further intensifying the conflict between the US and Iran.

NIFTY50 chart summary

The NIFTY50 commenced the week on a soft note, briefly slipping below the 23,800 mark at the close. Bearish momentum persisted throughout Monday’s session, with the index trading below its 20 and 50 EMAs on the hourly timeframe.

On the daily charts, the critical swing support stands at 23,600, which aligns with the July lows. A decisive weekly close below this zone could trigger fresh weakness, while 24,000 continues to act as the primary hurdle for any recovery attempts.

NIFTY50 open interest summary

The open interest data for today’s expiry indicates strong resistance on every level above 23,800. The 24,000 calls hold the highest open interest, acting as a big hurdle for the NIFTY50 on the upside. Meanwhile, the 23,500 puts hold the highest open interest on the downside, indicating strong support.