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Daily Nifty and Bank Nifty Analysis based on OI and Change in OI for 23rd March 2020

Market opened on quiet on little green and then slipped to red again. It got some fresh long from lower levels and gave a remarkable rally. I noted that some put writing were created at 8000, 8100 and 8500 levels accompanied with some fresh long and falling VIX, took Nifty high. Now, we will do nifty and bank Nifty analysis for 23rd March 2020 on the basis of OI, change in OI, VIX and Trend Cycles.


Bank Nifty Option Front
Bank Nifty has given closing at 20317.60 on spot on 20th March 2020. On the options front, maximum Put open interest was at 18,000 followed by 20,000 levels, while maximum Call OI was at 22,000 followed by 21,000 levels. The major addition in calls has been seen at 21000 and 21500 strikes.

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 19,000 and 21,000 levels.
1. Highest Call at 22,000. 
2. Highest Put at 20,000. 
3. Pivot Level at 20,000.

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 8745.45 at spot on 20th March, 2020. On the options front, maximum Call OI was at 10,000 and then 9000 levels while maximum Put OI was at 8,500 and then 8,000 levels.

Options OI data lay scattered at various strike prices. Call writing was seen at strike price 9,500 and 9000 while there was Put addition at 8,100 and then 8,500 levels. The options data indicated a shift in the wider trading range 8000 to 9000.


1. Highest Call at 9,000. 
2. Highest Put at 8,000. 
3. Pivot Level at 8,500.
India Vix
India VIX closed at 67.1 level with 7.06% fall. 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.

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 the market. VIX started rising again indicates the volatility may rise with bearish sentiment. Tend cycles indicates weakness in both indices. There might be some reaction can be seen on the measure taken by SEBI which is negative for the market.

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.

Daily Nifty and Bank Nifty Analysis based on OI and Change in OI for 23rd March 2020 Reviewed by Kumar Chandan on March 22, 2020 Rating: 5

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