Daily Nifty and Bank Nifty analysis based on OI and Change in OI for 18th March 2018

Bank nifty and Nifty opened positively but this doesn't last much longer and both the indices back in the red zone. However; we witnessed the volatile seasons today and finally Nifty gave close below 9000 first time since March 2017. Nifty is unable to sustain the higher and the gain are being used to sell more.

Now we will check out the Option data, VIX and Trend Cycles to find out what market has kept for tomorrow, Wednesday, 18^th March 2020.

Bank Nifty Option Front

Bank Nifty has given closing at 22155.15 on spot on 17^th March 2020. On the options front, maximum Put open interest was at 21,000 followed by 22,000 levels, while maximum Call OI was at 24,000 followed by 23,500 levels. The major addition in calls has been seen at 23000 and 24000 strikes.

 

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 21,000 and 24,000 levels.

1. Highest Call at 24,000. 

2. Highest Put at 21,000. 

3. Pivot Level at 22,000.

Open Interest Position 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 8967.05 at spot on 17^th March, 2020. On the options front, maximum Call OI was at 10,000 and then 9,500 levels while maximum Put OI was at 8,100 and then 8,500 levels.

Change in Open Interest Nifty

Options OI data lay scattered at various strike prices. Call writing was seen at strike price 9,500 while there was Put writing at 8,500 and then 8,100 levels, sliding lower day by day with lower market range. The options data indicated a shift in a wider trading range 8100 to 9,500.

 

Open Interest Positions Nifty

1. Highest Call at 10,000. 

2. Highest Put at 8,100. 
3. Pivot Level at 9,000.

India Vix

India VIX closed at 62.93 level with 6.81% gain. A higher VIX beyond 50 level suggested that volatile swings could continue in the market. Volatility has to cool down from current multi-year-high levels and only then the Indian market could see stability and have a smooth ride. It 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 Vix

If you see the VIX level on Box plot, you can easily spot that VIX with 62 is a black swan event. 

Nifty and Bank Nifty Trend Cycles

 

Trend Cycles Bank Nifty

Trend Cycles Nifty

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. Pivot levels have been shifted down that indicates another round of sell-off tomorrow.

Due to high volatility, the volume in the market has become almost 1/4th of the original. This indicates no stability in the market as of now.

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.