Nifty and Bank Nifty analysis for 23rd April 2020
Bank nifty and Nifty opened with a marginal gap up but corrected in initial trades. The correction was used for buying that’s the reason both the indices rallied from lower levels. Buying emerged mainly in Reliance Industries, and some of FMCG, Banking and IT. Let’s do analysis on Nifty and Bank Nifty based on OI, change in OI, India VIX and Trend Cycles for 23rd April, 2020.
Bank Nifty Option Front
Bank Nifty has given closing at 19701.85 on spot on 22nd April 2020. On the options front, maximum Put open interest was at 19,000 followed by 18,000 levels, while maximum Call OI was at 21,000 followed by 20,500 levels. The OI positions are scattered at various strike rates, indicates the volatility can remain in the market.
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 18500 to 20500.
1. Highest Call at 21,000.
2. Highest Put at 19,000.
3. Pivot Level at 19,500.
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 9187.30 at spot on 22nd April, 2020. On the options front, maximum Call OI was at 9,500 and then 9300 levels while maximum Put OI was at 9,000 and then 8,800 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 9,000 and 9500.
1. Highest Call at 9500.
2. Highest Put at 9,000.
3. Pivot Level at 9200
3. Pivot Level at 9200
India Vix
India VIX moved down by 5.26% and closed at 42.82. A higher VIX 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.
Trend Cycles
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| Bank Nifty Trend Cycles |
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| Nifty Trend Cycles |
Conclusion
The OI is scattered huge around the pivot level both side in calls as well as put sides. That indicates we might face some range-bound session. However, volatility is still high in the market. Trend Cycles are forming a short cover and short cycle. 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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