Bank Nifty and Nifty analysis based on OI and Change in OI for 11th March 2020

It was manic Monday sell-off as Nifty gave close below 10500 with slump of 538 points. India Vix crossed 30 levels in the shadow of the Corona Virus. In the last few hours, we witnessed some recovery but that was not enough to bring Bank Nifty and Nifty green. Both indices, Nifty and bank nifty both closed under deep red. Now, we will look into option data and trend cycles and analyze them for trading on Wednesday.

Bank Nifty Option Front

Bank Nifty has given closing at 26462.6 on spot on 9^th March 2020. On the options front, maximum Put open interest was at 25,000 followed by 26,000 levels, while maximum Call OI was at 28,000 followed by 27,500 levels. A major addition in calls has been seen at 27000 and 26500 and major unwinding in the put has been seen at all immediate strike.

 

Bank Nifty OI Positions

Trading Range Of Bank Nifty

Now time to find out the trading range of the bank nifty. For this purpose, we need to look for the highest call OI Row and Highest Put OI Row on the option chain of the Bank Nifty. Options data indicated a trading range between 25,000 and 27,000 levels.

1. Highest Call at 25,000. 

2. Highest Put at 27,000. 

3. Pivot Strike at 26,500.

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 10451.45 at spot on 9^th March, 2020. On the options front, maximum Call open interest is at 11,000 and then 11,800 levels while maximum Put open interest was at 10,000 and then 10,500 levels. Major unwinding has been seen at 10,500 put. Options data indicated a broad trading range between 10,000 and 11,000 levels.

Nifty OI Positions

1. Highest Call at 11,000. 

2. Highest Put at 10,000. 
3. Pivot Level at 10,500.

India Vix

India VIX spikes up 20.1% to 30.8. India VIX 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.

Conclusion:

The OI scattered here and there that indicates volatility will be there in the market. VIX started rising again indicates the volatility may rise with bearish sentiment. Tend cycles indicates weakness in both indices.

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.