Bank Nifty and Nifty Analysis based on OI and Change in OI for 16th April 2020
Nifty and Bank Nifty erased early gains and closed bearish today. Both the indices extended the decline for the second straight session as bears took charge in the second half with selling pacified in Bank Nifty led by Kotak and Hdfc banks. Some profit booking was also seen in pharma stocks such as Cadila and Sun pharma.
We will do analysis for bank nifty and nifty based on OI, Change in OI, Trend Cycles and India VIX for 16th April 2020.
Bank Nifty Option Front
Bank Nifty has given closing at 19057.05 on spot on 15th April 2020. On the options front, maximum Put open interest was at 18,000 followed by 18,500 levels, while maximum Call OI was at 20,000 followed by 21,000 levels. The OI positions are scattered at various strike rates, indicates the volatility can remain in the market. Major call writing has been seen at 20000 and 19500levesls.
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 range seems to be 18000 to 20000.
1. Highest Call at 20,000.
2. Highest Put at 18,000.
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 8925.30 at spot on 15th April, 2020. On the options front, maximum Call OI was at 9,500 and then 9000 levels while maximum Put OI was at 8,500 and then 8,000 levels. The OI positions are scattered at various strike rates, indicates the volatility can remain in the market. The trading Range of the Nifty is between 8,500 and 9500.
1. Highest Call at 9500.
2. Highest Put at 8,500.
3. Pivot Level at 9000.
3. Pivot Level at 9000.
India Vix
India VIX closed at 49.73 level with 3.35% fall. A higher VIX around 50 level suggests 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.
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. Trend Cycles are forming a long unwinding and Long cycles. The trend cycles indicates the sell on rise 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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