F&O stocks: SBI, Axis Bank among 5 stocks with long buildup
When a stock price moves up and the open interest on the counter follows the same, it is taken as a sign of a long buildup.
indicates that bulls are likely to dominate the following counters.In Monday’s trading session, the following five stocks witnessed a build of fresh long positions. Let’s first understand how it is concluded whether a stock has seen a buildup of fresh long position or not. When a stock price moves up and the open interest on the counter follows the same, it is taken as a sign of a . The signal is considered more reliable if the volume on the counter has also seen an increase.
SBI's stock price gained 2.95%, and open interest saw a rise of 0.51%.
Zee Entertainment Enterprises price surged 3.05%, and open interest saw an increase of 0.49%.
Axis Bank rose 2.59%, and the open interest saw an increase of 1.88%.
Cummins India's stock rose 2.56%, and the open interest saw an increase of 1.59%.
IndusInd Bank price jumped 2.29%, and open interest saw an increase of 2.14%.
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Some additional checks would help traders make better trading decisions as they increase the probability of a follow-up of the upward movement in the stock price. First, if this fresh long build has come when the stock is very close to its 52-week high, that increases the probability of the stock making an attempt to break its previous 52-week high.
Second, if this long buildup is accompanied by any bullish crossover, which means in the current up move when the open interest has moved up, the stock price has been able to cross either its 20, 50 or 100-day moving average. Another couple of points which traders should keep in mind is looking at the matrix of buildup of long positions on the basis of open interest. Also, check whether there is any extraordinary buildup of long positions in any out-of-money call option, especially any far-of-the-money call option. That indicates the probability of any informed person taking exposure through options.
Source: Stocks-Markets-Economic Times
