Trade Setup for May 12: Market volatility to stay high

The NSE Nifty 50 closed in the red on Friday, forming a small green candle intraday but failing to break past the crucial resistance level of 24,590, amid rising geopolitical tensions between India and Pakistan. The index ended 265.8 points lower at 24,008, while the BSE Sensex dropped 880.34 points to 79,454.47, snapping a three-week winning streak.

Limited Upside, Key Levels in Focus

Hrishikesh Yedve, Technical and Derivatives Research Analyst at Asit C. Mehta Investment Interrmediates, noted that the short-term upside remains capped below 24,590, while support lies near 23,850. Similarly, Bajaj Broking highlighted 24,000–23,800 as a key support zone, backed by the recent breakout and multi-week lows. A decisive breach below 23,800 could signal a deeper correction toward the 200-day EMA near 23,400–23,500.

Bank Nifty: Mixed Signals

Bank Nifty displayed signs of uncertainty, forming a doji on the daily chart and a bearish red candle on the weekly scale, according to Yedve. The index faces resistance around 55,000, while support is seen near 52,000, with Bajaj Broking marking a broader range between 53,000 and 56,000.

Volatility Ahead

Bajaj Broking expects market volatility to stay high, driven by geopolitical developments, tariff concerns, and the ongoing Q4 earnings season.

FII/DII Activity: Tensions Reverse FPI Sentiment

Foreign portfolio investors turned net sellers after 16 consecutive sessions of buying, offloading Rs 3,798.7 crore worth of equities on Friday. In contrast, domestic institutional investors bought stocks worth Rs 7,277.7 crore, according to NSE data.

F&O Snapshot (May 15 Expiry)

Nifty May futures fell 0.74% to 24,092, trading at a discount of 86 points.

Open interest in May futures dropped 1.2%.

Options data shows maximum Call OI at 26,000 and maximum Put OI at 20,650.

Put-Call Ratio (PCR): 1.06, with the highest change in Call OI at the 24,000 strike.