Nifty and Bank Nifty analysis for 6th May 2020
Nifty and Bank Nifty opened with a gap up and remained in green territory in the half but with starting of the second half, bears became active and gave a big red jerk from high. Let’s check us do the analysis for bank nifty and nifty for 6th May, 2020 based on OI, Change in OI, PCR, Max Pain and Trend Cycles.
Bank Nifty Option Front
Bank Nifty has given closing at 19271.75 on spot on 5th May 2020. On the options front, maximum Put open interest was at 19,000 followed by 18,000 levels, while maximum Call OI was at 21,500 followed by 21,000 levels. The OI positions are scattered at various strike rates, indicates the volatility can remain in the market. Significant amount of call addition 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 18000 to 20500.
1. Highest Call at 21,500.
2. Highest Put at 19,000.
3. Pivot Level at 19,500.
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 9205.6 at spot on 5th May, 2020. On the options front, maximum Call OI was at 10,000 and then 9,500 levels while maximum Put OI was at 9,000 and then 8,500 levels. The OI positions are scattered at various strike rates, indicates the volatility can remain in the market. Significant addition in call has been seen around ATM. The trading Range of the Nifty is between 9000 and 9500.
1. Highest Call at 10000.
2. Highest Put at 9,000.
3. Pivot Level at 9200.
3. Pivot Level at 9200.
India Vix
India VIX moved down marginally by 0.14% to 43.61. VIX once again start rising which will bring uncertainty in the market. A higher VIX suggests that volatile swings could 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)
|
Pre. PCR
|
Bank Nifty
|
19800
|
20000
|
0.59
|
0.75
|
Nifty
|
9300
|
9400
|
1.23
|
1.35
|
Remarks
|
Trend Cycles
 |
| Nifty Trend Cycles |
 |
| Bank Nifty Trend Cycles |
Conclusion
The VIX has started rising again that indicates the uncertainty in the market. The Higher VIX will bring higher sell-off in the market. The OI data have been scattered on the option chain that also indicates the volatile swing in the market. Trend cycles showing short and unwinding cycles, which indicate a weakness. The Pivot levels are also shifting down.
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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