So today in this video, we are going to understand in a very easy way, you could say in the easiest way, how OI analysis works and according to the OI, we will understand where the market can go, if the market can go further, we will try to analyze it.
So, what happens is that usually people get trapped in the market. People who trade options, for example, they see the Bank Nifty right now, there was a gap, after the gap, it showed bullish momentum, how can you capture it? We are going to talk about that now, by looking at the OI data and we will do it in a very simple way, after that, you see the market is range bound, the market is range bound, how do we track all this? So, here we are going to the section of just figuring it out, now we had opened the chart of the Bank Nifty, so I was on the Bank Nifty, now you will say I can see so many bars here, red and blue, what does it mean? OI shows where the sellers are, red are put option sellers and blue are call option sellers, so if I look now, where is the bigger red line? You will see the bigger red line is above 51000 it means bigger put option sellers are at 51000 level so whatever analysis I am giving is according to today but maybe you are watching this video after 1 year or 2 years maybe by that time Nifty bank will be at 55000 or 60,000 instead of 50,000 so if it is at any other level or maybe it is below then you will use the same analysis and this one is day specific so now we are seeing that chance of going below 51000 is less because there are lot of put option sellers here and they will not give you good return but also we have to track that if put option sellers run then the bearish side may get a lot of momentum so how will you find then what is the change like what you see here in the morning? The blue line is at the bottom, the one below zero is in Negative, so this position is short, here the OI amount of 3.36 lakhs has been reduced on the buy side, because the seller does not want to be in loss, he reduces his amount, it means you see in the options there is buy and sell, someone has sold, so the one who has sold, if his loss comes, what will he do? He will go to the market and buy. What will he buy? He will buy the option. That is why the momentum came to the option and this momentum is very good for the option buyer. So, what you saw in the morning was that the bullish momentum came in Bank Rifty. Why was this because the seller of the call option reduced his position? There was a gap. Maybe the seller of the call option was already in loss. And after that bullish gap, if the position is sold short, what is the indication that short selling can give bullish momentum to the market? Now when it falls, now we are seeing here that 51,200 is a level, which is a change in OI, at which we are seeing a change, at which there is addition in call option, there is addition in put option, it means now support and resistance is at 51,200 level, so if the market falls below 51,200 then where is the support? 51,200. So, we will not let it fall, we will go up and, … it falls below 51,200 then we will not let it go up, then it will go down, so if you look at the chart, what is happening like this? Now see if we see here that the market is going up, it is going up above 200, then it is going down, then it is going down, then it is going up, so how long will it go up and down, it will continue like this until there is no clear breakout, now why is there no clear breakout? Here you can see, if we look according to OI then there is a resistance here, it is difficult to break above 200, there are many blue lines here, and now, where is the biggest blue line? It is at 52,000 so now if there is a trap in the market, I am saying all these things in short but with experience you will understand, if there is a trap then you will see the position of change in OI, the blue line will become small or it will become negative, negative is a big thing, because now it is with 20 lakh amount, so 20 lakh amount 20 lakh can come out only when there is a big momentum, so if you start cutting from the beginning, it starts decreasing and the red line increases then you get an indication that support is getting stronger from here, resistance is getting weaker, the market will go to the other side, so if you understand OI analysis in this way then it will help you a lot, what I am seeing right now, I am seeing a clear sideways cut, why I am seeing it, because support and resistance are strong,