Daily Bank Nifty and Nifty analysis for 20th March 2020

Another volatile day for Bank Nifty and Nifty went in the favour of the bears. Indices opened gap down and recover sharply from the day’s low but bears took this opportunity for another round of sell. And finally both the indices settle in deep red. We have left with data on the basis of that data we will do nifty and bank nifty analysis for 20^th March Trading by checking OI, change in OI, VIX and trend Cycles.

Bank Nifty Option Front

Bank Nifty has given closing at 20083.50 on spot on 19^th March 2020. On the options front, maximum Put open interest was at 20,000 followed by 19,000 levels, while maximum Call OI was at 22,000 followed by 21,000 levels. The major addition in calls has been seen at 21000 and 22000 strikes.

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 19,000 and 21,000 levels.

1. Highest Call at 22,000. 

2. Highest Put at 20,000. 

3. Pivot Level at 20,000.

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 8263.45 at spot on 19^th March, 2020. On the options front, maximum Call OI was at 9,000 and then 8,500 levels while maximum Put OI was at 8,100 and then 7,500 levels.

Options OI data lay scattered at various strike prices. Call writing was seen at strike price 8,500 while there was Put unwinding at 8,100 and then 7,500 levels. The options data indicated a shift in the wider trading range 7500 to 8,500.

1. Highest Call at 9,000. 

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

India Vix

India VIX closed at 72.19 level with 12.89% 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.

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 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.