Trade setup for May 2: Will NIFTY50 breakout from consolidation? Here’s all you need to know

NIFTY50

Max call OI:24,800 Max put OI:24,000 (Ten strikes to ATM, 08 May Expiry)

NIFTY50 closed April on a positive note by gaining nearly 12% from the recent swing low of 21,745. The rally was largely driven by multiple factors, such as strong domestic tailwinds including optimistic earnings season, rate cut, ease in reciprocal tariffs and strong FII buying.

On monthly charts, NIFTY50 gave a closing above the monthly 21 EMA levels for the second month. Historically index has found support at these levels and bounced back after correction, except for a few occasions like March 2020. On daily charts, after a rally of nearly 12% from the low’s index now eyes for breakout above 24,500 levels. A successful breakout above these levels could lead us to next resistance levels of 24,800.

Options buildup

On the options front, the 08 May expiry contracts indicate new resistance levels of 24,800 with the highest open interest on the call side. Similarly, on the flipside, the 24,000 puts hold the highest open interest, indicating strong support for the weekly expiry.

SENSEX

Max call OI:80,500 Max put OI:80,000 (Ten strikes to ATM, 06 May expiry)

SENSEX has jumped nearly 3.65% in April and nearly 12% from the monthly lows. The strong bounceback from current levels was led by banking stocks, which rallied in optimism on strong quarterly earnings, coupled with other domestic tailwinds.

On technical charts, the index took support of 21 EMA levels in the previous month and closed above the previous monthly high levels, indicating a reversal of the trend. The index has followed its historical trend of taking support at 21 EMA levels and bouncing back. On daily charts, the index looks out to break out above the consolidation levels. Experts believe a breakout above recent swing high levels of 80,300 levels could take the index to 82,000 levels.

Option buildup

The initial buildup for the 06 May expiry indicates a small range for the expiry. The highest open interest on the call side stands at 80,500 and on the flip side at 80,000 puts, indicating resistance and support at the respective levels for the current expiry.

Stock scanner

Long build-up: SBILife, HDFC Life, Maruti

Short build-up: Bajaj Finserv, Bajaj Finance, Trent

Top traded futures contracts: Bajaj Finance, Reliance, SBI

Top traded options contracts: Infy 1600 CE, HDFC Bank 2040 CE

Under F&O ban: RBL Bank.

Out of F&O ban:

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