Daily Bank Nifty and Nifty Analysis for 3rd April 2020
The bears got another upper hand in the market and dragged the Nifty 4 per cent. We witnessed decline throughout the sessions. Now, we will do an analysis of Nifty and Bank Nifty based on Open Interest, Change in open Interest, India Vix and Trend Cycles for 3rd April 2020.
Bank Nifty Option Front
Bank Nifty has given closing at 18202.5 on spot on 1st April 2020. On the options front, maximum Put open interest was at 18,000 followed by 17,000 levels, while maximum Call OI was at 20,000 followed by 19,000 levels. OI positions are scattered at various strike rates, indicates the volatility can remain in the market. Major call writing has been seen at 19000 and 18500.
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 19000.
1. Highest Call at 20,000.
2. Highest Put at 17,000.
3. Pivot Level at 18,000.
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 8253.8 at spot on 1st April, 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 7,500 levels. Options OI data lay scattered at various strike prices, indicate the volatility. Trading of the Nifty is between 7500 and 9000.
1. Highest Call at 9000.
2. Highest Put at 7,500.
3. Pivot Level at 8200.
3. Pivot Level at 8200.
India Vix
India VIX closed at 60.05 level with 6.76% fall. A higher VIX beyond 50 level suggested that volatile swings could continue in the market. Volatility has to cool down from the higher levels and only then the Indian market could see stability and have a smooth ride. However, Volatility has been started cooling from higher levels. In the last two days, The Vix has been fallen almost 16 per cent.
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. Indices are developing a short-short cover cycle, indicates the weakness in it. Pivot Levels in the both the indices shifted down, indicating the weakness.
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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Hi, thanks for analysis. Can you please explain how nifty and bank nifty trend cycles are derived?
ReplyDeleteHello,
ReplyDeleteThanks for stopping by here. I have explained these things in my old Youtube videos. Please check those.