Bank Nifty and Nifty Analysis based on OI and Change in OI for 5th March 2020

Bank Nifty and Nifty open gap up but, in a second, the bears griped the market aggressively and dragged the indices in the red territory. However, we witnessed a tremendous recovery in the second half of the session that helped indices to shed most of the intraday losses. Now, we will look into option data and trend cycles and analyze them for trading tomorrow.

Bank Nifty Option Front

Bank Nifty has given closing at 28671.55. on spot on 4^th March 2020. On the options front, maximum Put open interest was at 28,000 followed by 28,500 levels, while maximum Call OI was at 29,500 followed by 29,000 levels. The major addition in calls and major unwinding in the puts have been seen around the immediate levels of the At the Money.

 

Change In OI for 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 28,500 and 29,500 levels.

1. Highest Call at 29,500. 

2. Highest Put at 28,000. 

3. Pivot Strike at 28,500.

Open Interest Position in Bank Nifty

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 11254.2 at spot on 4^th March, 2020. On the options front, maximum Call open interest is at 11,500 and then 11,400 levels while maximum Put open interest was at 11,000 and then 11,200 levels. Major unwinding has been seen at 11300 put. Options data indicated a broad trading range between 11,000 and 11,400 levels.

Change in OI for Nifty

1. Highest Call at 11,500. 

2. Highest Put at 11000. 
3. Pivot Level at 11200.

Open Interest Position for Nifty

India Vix

India VIX felled 1.28% to 24.22. Still, 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.

VIX Box Plot

Trend Cycles of Nifty and Bank Nifty

Some data needed for developing Trend Cycles are yet to available at NSE. We will post trend cycles as soon as we get that.

Conclusion:

VIX is very high. That indicates the volatile market. Option chain is showing bearish data as pivot levels in both the indices has been shifted down. Good resistance can be seen at 28800 and 29000 for bank nifty and for Nifty, these are at 11300, 11400 and 11500 levels.

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.