Nifty 50 Expiry Outlook: US Rally, Short Covering & Key Stocks to Watch on Opening Bell

As we head into the monthly expiry, the markets are abuzz with short-covering anticipation and global cues. The Indian ADR and global indices snapshot from May 27 paints a cautiously optimistic picture, with Nasdaq and Dow Jones leading a tech-led rally. Indian indices, however, closed in the red, with the Nifty 50 at 24,826.20 (down 174.95 pts, -0.70%) and Sensex at 81,551.63 (down 624.82 pts, -0.76%).

But is this just a dip before a bounce? Let’s break it down with global cues, top Nifty 50 triggers, expiry outlook, and FII/DII flow analysis.

Global Cues: Green Lights from the West

US indices were in solid green:

Dow Jones closed at 42,247.13 (+104.05 | +0.25%)
Nasdaq surged to 19,153.23 (+416.42 | +2.22%)
S&P 500 gained 56.17 points to close at 5,907.37

Meanwhile, Indian ADRs were a mixed bag:

Infosys ADR +1.60%
Reliance ADR +0.58%
ICICI Bank ADR -2.83%
HDFC Bank ADR -0.13%

This suggests that IT and energy stocks may show strength at the open, while banking might still face pressure.

Top 10 Nifty 50 Stocks with Technical Triggers for May 28 Opening

Here are 10 key Nifty 50 stocks with technical setups that may influence tomorrow’s opening:

Infosys (INFY):
- ADR up 1.60%, positive momentum on US tech rally.
- Watch for a resistance breakout at ₹1,450.
Reliance Industries (RELI):
- ADR marginally up; nearing 52-week high.
- Above ₹1450 can trigger fresh longs.
ICICI Bank:
- ADR down sharply; stock nearing 200-DMA.
- ₹1,090 crucial support.
HDFC Bank:
- Weak ADR; ₹1,490-1,500 range acting as stiff resistance.
- Downside below ₹1,470 may invite short build-up.
Wipro:
- ADR in green; consolidation breakout awaited at ₹540.
Tata Motors:
- Oversold on short-term charts; potential bounce from ₹980 levels.
L&T:
- Testing 20-DMA; closing above ₹3,550 could trigger upside.
Bharti Airtel:
- Bullish wedge formation; above ₹1,250 could attract buying.
HUL:
- Defensive buying is expected near the ₹2,420-2,430 zone.
Maruti Suzuki:
- Strong RSI reversal; closing above ₹12,700 may lead to short-covering.

Expiry Day Dynamics: Short Covering Setup in Motion

With the market dipping today, a lot of shorts have built up ahead of expiry. This could lead to short covering if:

Nifty crosses 24,900 in early trade.
Global cues remain firm (Nasdaq-led rally).
IT and Reliance outperform.

The India VIX is at 18.63, up +0.51 points (+2.86%), indicating rising hedging activity. This suggests high volatility ahead of expiry, increasing the probability of intraday trend reversals.

FII & DII Activity: Bulls Getting Back in the Ring?

Latest data (May 27):

Participant	Segment	Action	Amount (in Cr)
FIIs	Cash	Buy	₹1,637 Cr
DIIs	Cash	Sell	₹872 Cr

FIIs have returned as net buyers after several sessions of outflows.
Positive FII flow supports the case for a pullback rally and expiry short-covering.
Options data shows the highest OI buildup at 24,900 PE and 25,000 CE—highlighting a narrow expiry range.

Strategy for Traders

Intraday Bulls: Watch Nifty 24,900–25,050 zone. Above this, short covering could push Nifty to 25,200.
Bearish Bias below 24,700: If global sentiment weakens or profit-booking kicks in.
Expiry Play: High volatility expected. Options writers must stay nimble.
Sectors to Watch: IT, Auto, and Energy are likely to lead. Avoid overexposure to banking unless ICICI/HDFC reclaim key levels.

Conclusion: Bulls Eyeing a Comeback but with Caution

Despite today’s correction, the US tech rally, improving ADR cues, and FII buying could set the stage for a bounce. The key will be the opening levels and whether heavyweights like Reliance and Infosys sustain early gains.

With expiry ahead, expect volatile but opportunity-rich trading for short-term players.

Stay tuned for tomorrow's post-market analysis and expiry summary.

The Financial And Tech Literacy