Bank Nifty and Nifty analysis based on OI and Change in Oi for 13th March 2020

It was a historical day for Nifty in big fall in a single day in terms of points. Nifty has posted biggest daily fall since October, 2008. Both the indices opened with gap down and from first tick got huge sell off. There is blood bath going on in global market. That is also reflected in Indian Market. Volatility level is too high to give a reversal sign. Currently, Nifty has breached the psychological level of 10000 and trading near 9500.

Now, we will look into option data and trend cycles and analyze them for trading on Friday.

Bank Nifty Option Front

Bank Nifty has given closing at 23971.15 on spot on 12^th March 2020. On the options front, maximum Put open interest was at 23,500 followed by 24,000 levels, while maximum Call OI was at 27,000 followed by 26,000 levels. Major addition in calls has been seen at 25000 and 26000.

 

Change in Open Interest Bank Nifty

Trading Range Of Bank Nifty

Now time to find out the trading range of the bank nifty. For this purpose we need to look for the highest call OI Row and Highest Put OI Row on the option chain of the Bank Nifty. Options data indicated a trading range between 23,000 and 25,000 levels.

1. Highest Call at 27,000. 

2. Highest Put at 23,500. 

Bank Nifty Open Interest Position

Highest call acts as the highest resistance and highest put acts as the highest support for the Nifty and bank nifty. Pivot level is the level that bulls and bears don’t want to let it go easily. Tug of the war goes around the pivot level between bulls and bears generally.

Trading Range Of Nifty

Nifty has given closing at 9590.15 at spot on 12^th March, 2020. On the options front, maximum Call open interest stood at 11,000 and then 10,100 levels while maximum Put OI was at 9,000 and then 9,500 levels. Options data lay scattered at various strike prices as many Put writers got trapped in the market fall. Even unwinding pressure kept the Street under pressure. Call writing was seen at 10,100 and then 10,000 levels while there was Put writing at 9,000 and then 9,500 levels, sliding lower day by day with the lower market range. Options data indicated a broad trading range between 9,000 and 10,000 levels.

Change in Open Interest Nifty

1. Highest Call at 11,000. 

2. Highest Put at 9,000. 
3. Pivot Level at 9500.

Open Interest Nifty

India Vix

India VIX spikes up 30.43% to 42. Vix is highest ever in the decade.

India VIX is sustaining above the maximum on Box Plot into outlier data on the daily scale and thus volatile swings may continue in the coming days. If you wonder what Box Plot is and how it works, you can check here details.

Box Plot India Vix

Nifty and Bank Nifty Trend Cycles

 

Bank Nifty Trend Cycles

Nifty Trend Cycles

Conclusion:

The OI scattered here and there that indicates volatility will be there in market. VIX started rising again indicates the volatility may rise with bearish sentiment. Tend cycles indicates weakness in both indices.

Disclaimer : The analysis has been prepared for informational and educational purposes only. It is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.