Interesting Data point, Observation & Analysis on Nifty OI

NIFTY OI is almost near high of 2015. On 3rd March 2015, OI peaked at 2.78 Crores & Nifty made a top on 4th March 2015.

NOW OI is at 2.73 crore which is almost equal to last years highest OI levels.

The difference it is IN 2015, in the preceding 3 weeks, NIFTY moved from 8500 to 9200 (nearly 9% upmove)(directional move)(a normal scenario)

While now in 2016 in the preceding 3 weeks, NIFTY moved within a range of 200 points (directional less)(something not normal - With huge built-up in OI, Nifty remained sideways)

Normally with a heavy position NIFTY correction is deeper. But this time as the markets have not moved higher like in 2015, there is a possibility, that there would be complex hedge positions in the system (which we are unaware of) or else the market should have given a directional move.

So the extent of the correction can also be much lesser. We might see a running correction of 3-5% & then it might resume the uptrend.

 

Nice observation, but I don't understand any thing. Don't know how open interest affects price movement