Nifty and Bank Nifty Analysis for 26th May 2020

Following a spike on Friday, Nifty corrected and slipped below the 9000. However, it captured little recovery from lower levels however, it trade in a small range and finally settled with a loss.

Though, the session started with the surprise rate cut by RBI that brought down the repo rate by 40 basis points. However, the rate cut was unable to refill the energy in the market and on bleak growth outlook given by Central Bank broken the sentiment. That was the reason that we saw some huge sell-off in Banking and NBFCs.
Let’s check the data and do the analysis for Bank Nifty and Nifty for 26th 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 17278.90 on spot on 22nd May 2020. On the options front, maximum Put open interest was at 16,000 followed by 16500 levels, while maximum Call OI was at 18,000 followed by 19,000 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 16000 to 18500.

1. Highest Call at 18,000. 
2. Highest Put at 16,000. 
3. Pivot Level at 17,500.
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 9039.25 at spot on 22nd May, 2020. On the options front, maximum Call OI was at 9,500 and then 9,000 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. The trading Range of the Nifty is between 8800 and 9200.

1.  Highest Call at 9500
2.  Highest Put at 9,000. 
3. Pivot Level at 9000.

India Vix

India VIX moved down sharply by 1.84% to 32.37. 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

Max Pain
Pre. Max Pain
Bank Nifty

Trend Cycles (EOD)
Bank Nifty Trend Cycles

Nifty Trend Cycles


Bank Nifty and Nifty are weak on the data. Call writers look stronger on the option chain. The Pivot level shifting down, indicates weakness. Highest call and highest put strikes have been shifted down that also indicates weakness in the Bank Nifty. Trend cycles are showing weakness in Bank Nifty however they are mixed for Nifty. Overall view on bank nifty and nifty are volatile with bearish sentiment.
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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