Trade setup for May 23: Consolidation continues in NIFTY50 and SENSEX; Check out the key levels and options data

Asian markets

The Asian markets traded in green across the board on Friday, shrugging off worries of the US fiscal situation. The Japanese indices traded over 260 points higher as the inflation print for April came in line with the expectations. The People's Bank of China injected CNY 500 billion into the system through the one-year medium-term lending facility. Owing to the strong liquidity supply with rate cuts, the Chinese and Hong Kong indices traded in green with gains of up to 0.4% on Friday morning.

US markets

The US stock markets closed flat the board on Thursday, with Nasdaq gaining 53 points as the only gainer among the benchmark indices. Dow Jones and S&P 500 closed flat with minor gains. Investors weighed concerns over the newly passed tax-and-spending bill against rising concerns over US fiscal debt. The new bill to reduce taxes and increase defence spending could inject $4 trillion into the national debt of $36 trillion, which could add more worries to the US fiscal situation.

Crude oil

The crude oil prices extended losses on Friday morning heading for a weekly decline in three weeks. The crude oil prices came under pressure on potential OPEC+ supply addition in the markets. In addition, the US crude oil stockpiles also increased unexpectedly earlier this week. The WTI crude oil prices hovered around $61 per barrel and Brent crude at $64 per barrel.

NIFTY50

Max call OI: 25,000

Max put OI: 24,500

Ten strikes to the ATM, 29th May expiry

NIFTY50 crossed the previous swing high resistance of 24,800 levels to touch 25,116 levels, showing bullish momentum. However, the index has shown a pullback to the support zone of 24,600 to 24,800 for the past few trading sessions. Experts believe the index found support at the 21 EMA levels of 24,468 for the near term. On the options front, the 25,000 calls hold the highest open interest for the 29th May expiry, indicating strong resistance at these levels. Similarly, 24,500 puts hold the highest open interest on the downside, indicating strong support at these levels.

SENSEX

Max call OI: 81,000

Max put OI: 81,000

(Ten strikes to the ATM, 27th May expiry)

The 30-share SENSEX index hit a new swing high of 82,718 levels, consolidating in the range of previous swing high levels of 82,000 to 82,200. The recent pullback of nearly 2000 points from the recent swing high levels indicates a profit booking at higher levels. Similar to the NIFTY50, the index found support at 80,638 on Thursday. Experts believe the index should close above today’s swing high level of 81323 for the rally to resume. On the options front, the 81,000 strike holds the highest open interest on the call and put side, indicating the narrow range for the expiry on 27th May.

Stock scanner

Long buildup:

Short buildup: ONGC, M&M

Top traded futures contracts: IndusInd Bank, BSE, Reliance

Top traded options contracts: Reliance 1400 CE, Reliance 1440 CE

Under F&O ban: Dixon, Manappuram, RBL Bank, Titagarh

Out of F&O ban: