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Bank Nifty and Nifty Analysis for 1st April 2020

Both of the indices opened at the positive note, but corrected sharply in initial hours of trading. Most of the time, indices were dancing in the range and finally closed in a green band. Now, we will do an analysis of Nifty and Bank Nifty based on Open Interest, Change in open Interest, India Vix and Trend Cycles for 1st April 2020.


Bank Nifty Option Front
Bank Nifty has given closing at 19144.0 on spot on 31st March 2020. On the options front, maximum Put open interest was at 17,000 followed by 18,000 levels, while maximum Call OI was at 21,000 followed by 20,000 levels. OI positions are scattered at various strike rates, indicates the volatility can remain in the market. Some call writing has been seen at 20000.

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. Trading seems to be 18000 to 20000.

1. Highest Call at 21,000. 
2. Highest Put at 17,000. 
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 8597.75 at spot on 31st March, 2020. On the options front, maximum Call OI was at 9,000 and then 9500 levels while maximum Put OI was at 8,000 and then 7,000 levels. Options OI data lay scattered at various strike prices, indicate the volatility. Trading of the Nifty is between 8000 and 9000.

1. Highest Call at 9000. 
2. Highest Put at 8,000. 
3. Pivot Level at 8600.

India Vix
India VIX closed at 64.4 level with 10.41% fall. A higher VIX beyond 50 level suggested that volatile swings could continue in the market. Volatility has to cool down from the higher levels and only then the Indian market could see stability and have a smooth ride. However, Volatility has been started cooling from higher levels.
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.
Nifty and Bank Nifty Trend Cycles
Bank Nifty Cycles

Nifty Trend Cycles

Conclusion:


The OI scattered here and there that indicates volatility will be there in the market. Some cooling has been seen today in VIX, if VIX continues to cool down, it will help the market to form a bottom. However, volatility is still high in the market. Pivot shifted little up in the nifty, indicates good sign. Indices are developing a short-short cover cycle, indicates the weakness in it.
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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Bank Nifty and Nifty Analysis for 1st April 2020 Reviewed by Kumar Chandan on March 31, 2020 Rating: 5

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