Nifty and Bank Nifty analysis based on OI and Trend cycles for 9th April, 2020

Today Nifty and Bank Nifty witnessed the very volatile session. Both were opened with a gap down and then rallied sharply to make day’s high. But failed to sustain the high and lost all the gains in the latter half. Now we do analysis of Bank Nifty and Nifty based on Open Interest, Change in OI, India VIX and Trend Cycles for 9th April 2020.

Bank Nifty Option Front
Bank Nifty has given closing at 18946.45 on spot on 8th April 2020. On the options front, maximum Put open interest was at 18,000 followed by 17,000 levels, while maximum Call OI was at 20,000 followed by 21,000 levels. OI positions are scattered at various strike rates, indicates the volatility can remain in the market. Major put writing has been seen at 18000 and 18500.

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 17500 to 20000.
1. Highest Call at 20,000. 
2. Highest Put at 18,000. 
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 8748.75 at spot on 8th April, 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 8,500 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 8700.

India Vix
India VIX closed at 52.24 level with 0.85% gain. 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 Trend cycles
Nifty Trend Cycles

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. Trend Cycles are forming a long unwinding and Long cycles. This indicates the market is unable to sustain at the high and every rise is being used for sell.
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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