New long positions increased in Friday’s trading in five stocks: First, let’s understand how it is determined whether a new long position has been accumulated in a stock.
When a stock price rises and so does the open interest on the counter, it is seen as a sign of a long-term rally. If the volume of the counter is also increasing, the signal is considered more reliable.
Dixon Technologies stock rose 8.33%, and open interest rose 35.1%.
M&M price increased by 6.95% and open interest increased by 6.13%. NMDC rose 4.22% and open interest rose 0.12%. Navin Fluorine stock rose 3.01%, with open interest increasing 0.74%. Oberoi Realty stock price rose 2.39% and open interest rose 3.26%.
Also read: F&O Stock Strategy: How to trade Bharti Airtel and BEL? Some additional checks can help traders make better trading decisions as they increase the chances of the stock price rally continuing .
First, if this new long build occurs when the stock is very close to its 52-week high, it increases the likelihood that the stock will attempt to break its previous 52-week high.
Second, if this long-term rally is accompanied by a bullish crossover, that is, in the current bull market when open interest has increased, we know that stocks were able to exceed their 20-day, 50-day, or 100-day moving averages. means. Another thing traders should keep in mind when trading is to look at the long position accumulation matrix based on open interest.
Also, check for abnormal long position buildup in out-of-money call options, especially far-of-the-money call options. This indicates the potential for those with information to be exposed through the option.
