Bank Nifty and Nifty analysis based on OI and Change in OI for 9th March 2020

Under the fear of Corona Virus, global slow down and high volatility, the market is facing huge sell-off from the higher levels. Each rise was utilized for sell on last trading session. Both indices, Nifty and bank nifty both closed under deep red. Now, we will look into option data and trend cycles and analyze them for trading on Monday.

Bank Nifty Option Front

Bank Nifty has given closing at 27801.45 on spot on 6^th March 2020. On the options front, maximum Put open interest was at 27,000 followed by 27,500 levels, while maximum Call OI was at 29,000 followed by 29,500 levels. The major addition in calls has been seen at 28500 and 28000 and major unwinding in the put has been seen at 28,500 and 28,000.

 

OI positions in 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 27,000 and 29,000 levels.

1. Highest Call at 29,000. 

2. Highest Put at 27,000. 

3. Pivot Strike at 28,000.

Change In OI for 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 10989.45 at spot on 6^th March, 2020. On the options front, maximum Call open interest is at 11,500 and then 11,300 levels while maximum Put open interest was at 10,500 and then 10,900 levels. Major unwinding has been seen at 11100 put. Options data indicated a broad trading range between 10,700 and 11,300 levels.

OI change Nifty

1. Highest Call at 11,500. 

2. Highest Put at 10500. 
3. Pivot Level at 11000.

OI positions in Nifty

India Vix

India VIX spikes up 10.3% to 25.64. 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 Position

Trend Cycles Nifty and Bank Nifty

Nifty Trend Cycles

Bank Nifty Trend Cycles

Conclusion:

The OI scattered here and there that indicates volatility will be there in the 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.