Nifty and Bank Nifty Analysis for 8th July 2020
Bank Nifty opened on a positive note but corrected towards 22000 level in the initial trades. At the lower levels, it witnessed a huge buying interest that helped bank nifty to surpass the previous hurdle at 22,500.
Nifty opened positive near the 10,800 mark, but failed to hold at higher levels and drifted towards the 10,690 mark in the first half of the session. However, the index witnessed a decent recovery of 100 points from lower levels as the bulls took the opportunity to buy the decline. The index finally closed near the 10,800 mark, which was its opening level.
Let’s check the data and do the analysis for Bank Nifty and Nifty for 8th July 2020 based on Open Interest, Change in OI, PCR, Max pain and Trend Cycles.
Bank Nifty Option Front
Bank Nifty has given closing at 22628.00 on spot on 7th July 2020. On the options front, maximum Put open interest was at 22,000 followed by 21,500 levels, while maximum Call OI was at 23,000 followed by 23,500 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 21500 to 23000.
1. Highest Call at 23,000.
2. Highest Put at 22,000.
3. Pivot Level at 22,500.
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 10799.65 at spot on 7th July, 2020. In options front, maximum Put open interest stood at 10,000 level followed by 10,500, while maximum Call OI was at 11,000 followed by 10,800 levels. Call addition was seen at 10,850 followed by 11,000 levels, while there was meaningful Put writing at 10,650 followed by 10,800 levels. Options data suggested a shift in trading range between 10,600 and 11,000 levels.
1. Highest Call at 11000.
2. Highest Put at 10,000.
3. Pivot Level at 10,800.
3. Pivot Level at 10,800.
India Vix
India VIX fell around 0.39 per cent to 25.10 level. A gradual decline in volatility, which has been falling from the last three weeks and is at the lowest level in four months, suggests an overall bullish stance. 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
|
Pre. Max Pain
|
PCR (OI)
| |
Bank Nifty
|
22300
|
22000
| 1.07 |
Nifty
|
10700
|
10700
|
1.63
|
Remarks
| |||
Trend Cycles (EOD)
 |
| Bank Nifty Trend Cycles |
 |
| Nifty Trend Cycles |
Conclusion
The writers have been shifted their position up, indicates the strength in indices. Put writers are at the driving sheet as of now. Max Pain strike has been shifted up that also support the bullish sentiment. The OI on option chain indicates range-bound to little bullish sentiment.
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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