"Spot Stock Market Bottoms Like a Pro & Act Fast for Big Gains!"
This video discusses about how derivative data in conjunction with price action can be of great help to the option traders in Indian stock markets.
It has been found based on historical analysis, that the moves which are supported or backed by strong Open interest participation have a sound probability of sustenance. Validating a breakout in Nifty/Banknifty in conjunction with Open Interest will help in trading breakouts confidently.
How do you scale these comparisons, as different price trajectories and price levels prevail in different indices, like Nifty or BankNifty. Similarly for stocks as underlying on NSE in the derivatives segment, the price levels and price trajectories vary.
This applies to Open Interest too. Here, the concept of price percentile is effective,
Price OI Percentile
Price Move along with participation (Open Interest Increment) has More Probability of Sustaining
If Price Percentile is greater than 90 (+) Open Interest Percentile is greater than 90 --- Price is Recent High + OI Recent High….
Probability of Breakout Sustaining after Such Move Much Higher
If Price Percentile lesser than 10 (+) Open Interest Percentile is greater than 90 --- Price is Recent Low + OI Recent High….
Probability of Breakdown Sustaining after Such Move Much Higher
Seasoned derivatives expert with over 6 years of experience across equities, derivatives, and commodities markets. With a proven track record of successful trading and deep market insights.
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