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Daily Bank Nifty and Nifty analysis based on OI and Change in OI for 19th March 2020

Another day went into the favour of bears. Bank Nifty and Nifty opened with a gap up but unable to sustain that high and got huge sell off from the day’s high. As the season progressed, we saw intensive sell in indices. Nifty breached the recent low and made a close below three years low. Now, we will do nifty and bank nifty analysis based on Open Interest, Change in open, VIX and Trend Cycles for Thursday, 19th March 2020.

Bank Nifty Option Front
Bank Nifty has given closing at 20580.20 on spot on 18th March 2020. On the options front, maximum Put open interest was at 21,000 followed by 20,000 levels, while maximum Call OI was at 23,000 followed by 22,000 levels. Major addition in calls has been seen at 21000 and 22000 strikes. Major unwinding has been seen at 22000 put.


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 19,200 and 22,000 levels.

1. Highest Call at 23,000. 
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 8468.8 at spot on 18th March, 2020. On the options front, maximum Call OI was at 10,000 and then 9,000 levels while maximum Put OI was at 8,100 and then 8,500 levels.

Options OI data lay scattered at various strike prices. Call writing was seen at strike price 8,800 while there was Put unwinding at 8,100 and then 7,700 levels. The options data indicated a shift in wider trading range 8100 to 9,200.



1. Highest Call at 9,000. 
2. Highest Put at 8,100. 
3. Pivot Level at 9,000.
India Vix
India VIX closed at 63.93 level with 1.641% 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 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.

Nifty and Bank Nifty Trend Cycles

Bank Nifty trend Cycles

Nifty Trend Cycles

Conclusion:

The OI scattered here and there that indicates volatility will be there in 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 original. This indicates no stability in 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.

Daily Bank Nifty and Nifty analysis based on OI and Change in OI for 19th March 2020 Reviewed by Kumar Chandan on March 18, 2020 Rating: 5

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