Daily Nifty and Bank Nifty analysis based on OI and Change in OI for 17th March 2020

Bears negated the rebound of Friday and became aggressive today. Bank nifty and Nifty opened on a negative note with a big gap down and from first tick indices faced huge sell-off. The bears dragged the index lower as the session went on. Once again Monday turned to be a horrible Monday as we have seen in the history of the bear market. Thus nifty ended well bellow 9200. Bears are using every rise as a selling opportunity.

Now we will check out the Option data, VIX and Trend Cycles to find out what market has kept for tomorrow, Tuesday, 17^th March 2020.

Bank Nifty Option Front

Bank Nifty has given closing at 23078.78 on spot on 16^th March 2020. On the options front, maximum Put open interest was at 21,000 followed by 22,000 levels, while maximum Call OI was at 27,000 followed by 26,000 levels. The major addition in calls has been seen at 25000 and 24000 strikes.

 

Change In OI Bank Nifty

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 21,000 and 26,000 levels.

1. Highest Call at 27,000. 

2. Highest Put at 21,000. 

3. Pivot Level at 23,500.

OI Positions in Bank Nifty

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 9197.40 at spot on 16^th March, 2020. On the options front, maximum Call OI was at 10,000 and then 9,500 levels while maximum Put OI was at 8,100 and then 9,000 levels.

Change In OI Nifty

Options OI data lay scattered at various strike prices as many Put writers got trapped in the recent market fall. Even unwinding pressure kept the Street under pressure. Call writing was seen at strike price 9,500 while there was Put writing at 8,500 and then 8,100 levels, sliding lower day by day with lower market range. The options data indicated a shift in a wider trading range 8100 to 10,000.

OI Positions Nifty

1. Highest Call at 10,000. 

2. Highest Put at 8,100. 
3. Pivot Level at 9,000.

India Vix

India VIX closed at 58.87 level with 14.39% gain. A higher VIX beyond 50 level suggested that volatile swings could continue in the market. Volatility has to cool down from current multi-year-high levels and only then the Indian market could see stability and have a smooth ride. 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.

BOX Plot VIX

Nifty and Bank Nifty Trend Cycles

Bank Nifty Trend Cycles

Bank Nifty Trend Cycles

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. Pivot levels have been shifted down that indicates another round of sell-off tomorrow.

Due to high volatility, the volume in the market has become almost 1/4th of the original. This indicates no stability in the market as of now.

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.