Expiry trade setup: Will NIFTY50 reclaim 26,000 on Tuesday or fall further?

GIFT NIFTY futures traded 85 points lower on Tuesday morning, indicating a weak opening for NIFTY50 on the expiry day. The global market cues also remain mixed with Asian markets trading muted on Tuesday morning.

NIFTY50

Max call OI:26,200

Max put OI:25,900

(Ten strikes to ATM, 09 Dec expiry)

NIFTY50 witnessed heavy selling pressure in the second session, pulling the NIFTY50 index below 26,000 on Monday. Additionally, the broader markets witnessed a much severe selloff as midcap and smallcap indices fell nearly 2%. NIFTY50 continues to remain in a consolidating range of 25,900 to 26,200 owing to the absence of fresh buying at higher levels.

On the technical front, NIFTY50 closed below the 20 SMA support level, pointing towards a bearish momentum setup in the index. However, experts believe a closing above the 20 SMA level of 25,990 on Tuesday could negate the bearish setup, and a closing below it could further intensify it.

On the options data front, the 26,100, 26,200 witnessed heavy open interest addition on Monday, indicating a strong resistance above the 26,000 levels for today’s expiry. While 26,000 puts witnessed heavy unwinding of open interest, indicating further downside for Tuesday’s expiry.

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