Bank Nifty: Zone of 19,500-19,700 to act as crucial support

Banking Benchmark index-Bank Nifty traded in a range of 2,163.10 points during the week. The index has ended the week with a gain of 767.85 points or 3.85 per cent and formed a bullish candle with a long lower shadow. On Friday, all the constituents of Bank Nifty index ended in green, with Axis Bank gaining the most by 13.31 per cent, followed by ICICI Bank that surged 9.81 per cent.

The key takeaway from Friday’s session was that Bank Nifty closed above its 20-day EMA for the first time in the last 39 trading sessions. Bank Nifty also managed to close above 23.6 per cent Fibonacci retracement level of its prior downward move (32,613.10-16,116.25) decisively. Among the momentum indicators, 14-period weekly RSI has given a positive crossover thereby, depicting further upside momentum. On the weekly chart, the fast stochastic is also trading above its slow stochastic line.

Going ahead, the zone of 19,500-19,700 is likely to act as a crucial support for the index as it is the confluence of short-term moving averages, i.e. 8-day EMA and 13-day EMA. On the higher side, the level of 21,462, followed by 22,418 would be seen as the next major resistance for the index.

The derivatives data suggest that among Bank Nifty Calls, the 21,000 strike price is the most active call for April 23, 2020 weekly expiry. Among Bank Nifty puts, 19,000 strike price is the most active put for April 23, 2020 weekly expiry. For April 23, 2020 weekly expiry, open interest wise put-call ratio (PCR) is at 1.32. For April monthly series, PCR is at 1.12.

For April 23, 2020 weekly expiry, the highest call open interest is at 22,000 strike with 2,09,860 OI. On the put side, 19,000 strike has 3,06,660 open interest, which is the highest. The 22,000 call of April 23, 2020 weekly expiry today has seen a new addition of 1,33,680 open interest and on the put side, 19,000 put has seen a new addition of 1,84,020 open interest. For April 23, 2020 weekly expiry, the total call open interest is 17,33,980 and the put open interest is 22,92,160. For April monthly series, the highest call open interest is at 23,000 strikes with 1,55,220 OI, followed by 21,000 strikes with 1,24,420 OI. On the put side, the highest put open interest is at 18,000 strikes with 1,77,080 OI. The current derivative data suggest that the Max Pain is at 20,000.