Nifty and Bank Nifty Analysis for 4th June 2020
The Indian market continued its bull run even on Wednesday and It was 6 days in a row. Both the indices opened a gap up and buying at lower levels took indices to the higher levels. However; in last hour, Indices get a sharp sell-off, so nifty finally closed below its opening level.
Let’s check the data and do the analysis for Bank Nifty and Nifty for 4th June 2020 based on Open Interest, Change in OI, PCR, Max pain and Trend Cycles.
Bank Nifty Option Front
Bank Nifty has given closing at 20940.7 on spot on 3rd June 2020. On the options front, maximum Put open interest was at 20,000 followed by 19000 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. A good put 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 20000 to 22000.
1. Highest Call at 22,000.
2. Highest Put at 20,000.
3. Pivot Level at 21,000.
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 10061.55 at spot on 3rd June, 2020. The maximum Call open interest stood at 10,500 and then 10,200 levels while maximum Put OI was at 10,000 and then 9,700 levels. Significant Put writing was seen at 10,000 followed by 10,100 levels, whereas huge unwinding of the call has been seen at 10000. Options data indicated an immediate trading range between 9,900 and 10,200 levels.
1. Highest Call at 10500.
2. Highest Put at 10,000.
3. Pivot Level at 10,100.
3. Pivot Level at 10,100.
India Vix
India VIX remained flattish and fell marginally by 0.26 per cent to 30.04 level. The volatility index is hovering around its support of 30 and a lower VIX is supporting the higher market base. 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
|
20700
|
20000
|
1.10
|
Nifty
|
10000
|
9800
|
1.59
|
Remarks
|
Trend Cycles (EOD)
 |
| Bank Nifty Trend Cycles |
 |
| Nifty Trend Cycles |
Conclusion
The Pivot levels have been shifted up for the bank nifty and nifty supported by max pain. Put writers have a stronger hand. Bank Nifty has shown some long build-up-short cover cycles. Nifty is also showing long build-up and short cover.
Open Interest Images are generated by the Telegram Bot: OIinAction. You can also join it and can generate OI images for free.
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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