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Nifty and Bank Nifty Analysis for 12th May 2020

As we were discussing in our last analysis that the market is on the wheels of sell on rise. It followed exactly the same today as bank nifty and Nifty opened with a big gap and tried to sustain around the higher levels but unable to sustain. The bears got active and started selling every rise. Finally, indices were closed in red territory.

Let’s check the data and do the analysis for Bank Nifty and Nifty for 12th May 2020 based on Open Interest, Change in OI, PCR, Max pain and Trend Cycles.

Bank Nifty Option Front
Bank Nifty has given closing at 18950.5 on spot on 11th May 2020. On the options front, maximum Put open interest was at 18,000 followed by 18,500 levels, while maximum Call OI was at 20,000 followed by 21,000 levels. The OI positions are scattered at various strike rates, indicates the volatility can remain in the market. A good call addition and put unwinding has been seen around the ATM strike.

Trading Range Of Bank Nifty
Now time to find out the trading range of the bank nifty. Trading Range is a general range between the highest call strike and highest put strike. To find the range, we need to look for the highest call OI Row and Highest Put OI Row on the option chain of the Bank Nifty. Trading range seems to be 17000 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 9239.2 at spot on 11th May, 2020. On the options front, maximum Call OI was at 9,500 and then 9,400 levels while maximum Put OI was at 9,000 and then 9,200 levels. The OI positions are scattered at various strike rates, indicates the volatility can remain in the market. The trading Range of the Nifty is between 9000 and 9400.

1.  Highest Call at 9500
2.  Highest Put at 9,000. 
3. Pivot Level at 9200.


India Vix
India VIX declined marginally by 0.96% to 38.04. Higher VIX indicates the uncertainty in the market and suggests volatile swings may continue in the market. 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.
Derivative Data

Symbol
Max Pain
Pre. Max Pain
PCR (OI)
Bank Nifty
19300
19500
0.67
Nifty
9300
9300
1.26
Remarks




Trend Cycles (EOD)
 
Bank Nifty Trend Cycles

Nifty Trend Cycles

Conclusion


Bank Nifty has broken the range and closed below 19000. It looks weaker than Nifty. However, Nifty still looks in the range. Weakness in the Bank Nifty may affect Nifty. We have higher VIX that indicates the volatile swings in the market. Trend Cycles on Bank Nifty show Short-Short cycles but the Nifty cycles still looks mixed.
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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Nifty and Bank Nifty Analysis for 12th May 2020 Reviewed by Kumar Chandan on May 11, 2020 Rating: 5

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