Understanding OI Analysis for Market Trends OI analysis helps predict market movements by identifying where sellers are positioned. Red bars indicate put sellers, while blue bars represent call sellers. For instance, a significant red line at 51,000 suggests strong support and low chances of the market falling below this level unless there’s a major shift in positions.
Tracking Changes in Open Interest to Predict Momentum Changes in open interest (OI) reveal shifts between buyers and sellers that drive momentum. If call seller positions reduce significantly after losses or gaps up occur, it signals potential upward movement favorable for option buyers. Conversely, increasing resistance levels marked by blue lines can limit upside moves until they weaken.
Range-Bound Markets with Bullish Potential Markets often oscillate within defined ranges due to balanced support and resistance levels indicated by OI data. Stronger supports compared to resistances suggest bullish tendencies despite temporary sideways trends; e.g., Nifty shows robust support around 25k but faces challenges near 25.5k without weakening its upper barriers first.