Nifty and Bank Nifty Analysis for 18th May 2020
Friday, Nifty and Bank Nifty had a modestly positive opening, but soon bears made it slip into the negative territory. Both the indices kept on trading lower, however, in the latter half we saw some recovery that helped indices to close almost flat or with a negligible loss.
Let’s check the data and do the analysis for Bank Nifty and Nifty for 18th 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 18833.95 on spot on 15th May 2020. On the options front, maximum Put open interest was at 17,500 followed by 18000 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. 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 17500 to 19500.
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 9136.85 at spot on 15th May, 2020. On the options front, maximum Call OI was at 9,500 and then 9,400 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. The trading Range of the Nifty is between 9000 and 9300.
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 marginally by 0.43% to 38.01. 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
|
19000
|
19100
|
0.64
|
Nifty
|
9150
|
9200
|
1.14
|
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 range-bound with bearish sentiment.
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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