Trade setup for July 1: Can NIFTY50 defend 23,800 on Wednesday?

GIFT NIFTY futures traded 100 points higher on Wednesday at 7:45 am, indicating a positive start for the NIFTY50 on Wednesday. Stable crude oil prices and a strengthening rupee have reduced market anxiety, acting as the key sentiment drivers for Indian equities.

Brent crude oil prices steadied near the $73 per barrel mark as investors await updates on the ongoing US-Iran peace talks in Doha. Crude oil prices fell by 20% in June, the biggest monthly drop since March 2020.

US markets closed in the green on Tuesday, led by a rally in tech stocks. The NASDAQ 100 climbed 1.7%, the S&P 500 rose 0.8%, and the Dow Jones edged 0.2% higher. The Dow Jones advanced 2.5% in June, while the NASDAQ and the S&P 500 closed the month in the red, with losses of up to 1%.

Asian markets opened mixed as Korean stocks reversed the previous day's gains to trade 3% lower on Wednesday morning as the Korean Won hit a 17-year low against the US dollar. On the contrary, the Japanese and Hong Kong indices traded in the green despite the volatility among the Asian peers.

The NIFTY50 closed 80 points lower on Tuesday, amid the monthly expiry volatility. The index failed to close above 24,000 for the fourth consecutive month, indicating the absence of strong buying pressure at higher levels. However, the index managed to defend the 20 and 50 EMA levels of 23,820 and 23,850 on a closing basis, keeping the hopes of a reversal alive. On the other hand, 23,800 also remains a crucial level of support for Wednesday’s trading session, with 24,250 as the near-term resistance.

The initial data for the 07 July expiry indicates strong resistance at the 24,000 level. Similarly, 24,000 puts also hold the highest open interest, indicating strong support as well. However, 24,100, 24,200 and 24,300 calls hold high open interest concentration, indicating a limited upside for NIFTY50.