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Daily Nifty and Bank Nifty analysis based on OI and change in OI for 24th March 2020

Weakening of sentiments due to lock-down being enforced in various states, Nifty and bank nifty open with a huge gap down and then the global sell-off accelerated the pace to lock the Indian market in the lower circuit. This was the second lower circuit this year, the other was on 13th March 2020.

Trading halted for an hour and Market resumed but this time the fast and furious rebound was missing as that happened on last circuit day. It continued its downward move and the index ended with 13% loss, which is the highest-ever daily loss in the history of Indian Stock market. The market is under the strong bear grip, no ray of reversal has been seen.
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 17018.35 on spot on 23rd March 2020. On the options front, maximum Put open interest was at 17,100 followed by 17,900 levels, while maximum Call OI was at 19,000 followed by 18,000 levels. The major addition in calls has been seen at 19000 and 18000 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. There is no level left downside on Option chain, We cannot say anything about the range.
1. Highest Call at 19,000. 
2. Highest Put at 17,100. 
3. Pivot Level at 17,100.

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 7,610.25 at spot on 23rd March, 2020. On the options front, maximum Call OI was at 8,500 and then 8000 levels while maximum Put OI was at 7,000 and then 7,500 levels.

Options OI data lay scattered at various strike prices, indicate the volatility.

1. Highest Call at 8500
2. Highest Put at 7,000. 
3. Pivot Level at 7,500.

India Vix
India VIX closed at 71.98 level with 7.28% 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.

Nifty and Bank Nifty Trend Cycles
It will be uploaded soon.

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.
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 24th March 2020 Reviewed by Kumar Chandan on March 23, 2020 Rating: 5

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