Nifty and Bank Nifty Analysis for 28th April 2020
Nifty and Bank Nifty opened with a gap up and Nifty extended move above 9300 whereas Bank Nifty extended it towards 20100. However, both the indices consolidated most of the time. Now, we will do an analysis of Nifty and Bank Nifty based on OI and Change in OI, India VIX and Trend Cycles for 28th April 2020.
Bank Nifty Option Front
Bank Nifty has given closing at 20081.15 on spot on 27th 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 22,000 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 19000 to 21000.
1. Highest Call at 21,000.
2. Highest Put at 19,000.
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 9282.30 at spot on 27th April, 2020. On the options front, maximum Call OI was at 9,500 and then 10,000 levels while maximum Put OI was at 9,000 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 9,000.
3. Pivot Level at 9300.
3. Pivot Level at 9300.
India Vix
India VIX closed around 38, much lower than the high of 83. Still, it is high. 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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| Nifty Trend Cycles |
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| Bank Nifty Trend Cycles |
Conclusion
The OI is scattered huge around the pivot level both side in calls as well as put sides. The unwinding in put-side has been spotted that indicates the weakness. Data suggest the addition in call writing and addition in put-side buying happened in the market. It also indicates the weakness. The trend Cycles indicates the long unwinding - short-cover.
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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