Nifty and Bank Nifty Analysis for 31st March 2020
It was another week session for the Nifty and Bank Nifty as both indices lost its four days winning streak, and it seems bears once again are coming to the driving seat. Nifty ended at 8,281, down 379 points or 4.38 per cent. Volatility index India VIX increased by 1.53 per cent to 71.46 levels. Nifty Bank tumbled over 6 per cent. There was big action and reaction went around 8500 levels today. Now, We will do analysis for Nifty and Bank Nifty based on Open Interest, Change in Open Interest, India Vix and Trend Cycles for 31st March 2020.
Bank Nifty Option Front
Bank Nifty has given closing at 18782.40 on spot on 30th March 2020. On the options front, maximum Put open interest was at 16,000 followed by 17,000 levels, while maximum Call OI was at 20,000 followed by 21,000 levels. OI positions are scattered at various strike rates, indicates the volatility can remain in the market. Some call writing has been seen at 19000.
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. Trading seems to be 17000 to 20000.
1. Highest Call at 22,000.
2. Highest Put at 17,000.
3. Pivot Level at 19,000.
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 8281.1 at spot on 30th March, 2020. On the options front, maximum Call OI was at 9,000 and then 8500 levels while maximum Put OI was at 8,000 and then 7,000 levels. Options OI data lay scattered at various strike prices, indicate the volatility.
1. Highest Call at 9000.
2. Highest Put at 8,500.
3. Pivot Level at 8500.
3. Pivot Level at 8500.
India Vix
India VIX closed at 71.46 level with 1.53% gain. A higher VIX beyond 70 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. However, Volatility has been started cooling from higher levels.
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
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| Bank Nifty Trend Cycles |
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| Nifty Trend Cycles |
Conclusion:
The OI scattered here and there that indicates volatility will be there in the market. Some cooling has been seen today in VIX, if VIX continues to cool down, it will help the market to form a bottom. However, volatility is still high in the market. Pivot Shifted down again in bank Nifty, this indicates bearishness of the market.
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.
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