Bank Nifty and Nifty Analysis for 5th May 2020
Market starts the month on a negative note. One of the major reason for this negativity is the explode in the India VIX which rises by 28.48% and brought a new round of sell-off in the market. Benchmark indices opened with a huge gap down and bears were looking very aggressive from the first tick. Now, We will analyze bank nifty and Nifty based on OI, Change in OI, India VIX, PCR, Max Pain and Trend Cycles for 5th May 2020.
Bank Nifty Option Front
Bank Nifty has given closing at 19743.75 on spot on 4th May 2020. On the options front, maximum Put open interest was at 19,000 followed by 18,000 levels, while maximum Call OI was at 22,000 followed by 21,000 levels. The OI positions are scattered at various strike rates, indicates the volatility can remain in the market. Significant amount of call addition 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 18000 to 21000.
1. Highest Call at 22,000.
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 9293.50 at spot on 4th May, 2020. On the options front, maximum Call OI was at 10,000 and then 9,800 levels while maximum Put OI was at 9,000 and then 8,500 levels. The OI positions are scattered at various strike rates, indicates the volatility can remain in the market. Significant addition in call has been seen around ATM. The trading Range of the Nifty is between 9500 and 9700.
1. Highest Call at 10000.
2. Highest Put at 9,000.
3. Pivot Level at 9200.
3. Pivot Level at 9200.
India Vix
India VIX surged by 28.48% to 43.67. VIX once again start rising which will bring uncertainty in the market. A higher VIX suggests that volatile swings could 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
|
PCR OI
|
Bank Nifty
|
20000
|
0.9
|
Nifty
|
9400
|
1.45
|
Trend Cycles
 |
| Bank Nifty Trend Cycles |
 |
| Nifty Trend Cycles |
Conclusion
The VIX has started rising again that indicates the uncertainty in the market. The Higher VIX will bring higher sell-off in the market. The OI data have been scattered on the option chain that also indicates the volatile swing in the market. Trend cycles showing short cover - short cycles, which indicate a 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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