Bank Nifty and Nifty Analysis for 19th May 2020
From the first tick, the market started correcting and remain in red territory though out the session. Bank Nifty and Nifty were in the mood of breaking each and every support what comes in its way. We have already reacted of this fall on our post on Bond Yields.
Let’s check the data and do the analysis for Bank Nifty and Nifty for 19th May 2020 based on Open Interest, Change in OI, PCR, Max pain and Trend Cycles.
Bank Nifty Option Front
Bank Nifty has given closing at 17573.20on spot on 18th May 2020. On the options front, maximum Put open interest was at 17,000 followed by 16500 levels, while maximum Call OI was at 19,000 followed by 20,000 levels. The OI positions are scattered at various strike rates, indicates the volatility can remain in the market. A good call addition and put unwinding has been seen around the ATM strike.
Trading Range Of Bank Nifty
Now time to find out the trading range of the bank nifty. Trading Range is a general range between the highest call strike and highest put strike. To find the range, 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 16000 to 18500.
1. Highest Call at 19,000.
2. Highest Put at 17,000.
3. Pivot Level at 17,500.
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 8823.25 at spot on 18th May, 2020. On the options front, maximum Call OI was at 9,500 and then 9,200 levels while maximum Put OI was at 8,500 and then 8,200 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 8500 and 9100.
1. Highest Call at 9500.
2. Highest Put at 8,500.
3. Pivot Level at 8900.
3. Pivot Level at 8900.
India Vix
India VIX moved up sharply by 7.63% to 40.92. Higher VIX indicates the uncertainty in the market and suggests volatile swings may continue in the market. 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.
Derivative Data
Symbol
|
Max Pain
|
Pre. Max Pain
|
PCR (OI)
|
Bank Nifty
|
18000
|
19000
|
0.47
|
Nifty
|
9000
|
9150
|
0.95
|
Remarks
|
Trend Cycles (EOD)
 |
| Bank Nifty Trend Cycles |
 |
| Nifty Trend Cycles |
Conclusion
Bank Nifty and Nifty are weak on the data. Call writers look stronger on the option chain. The Pivot level shifting down, indicates weakness. Trend Cycles on Bank Nifty show Short-Short cycles but the Nifty cycles still looks mixed. Overall view on bank nifty and nifty are volatile with bearish sentiment. Max Pain is shifting down, indicates the weakness as well.
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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