The stock market has certain indicators which if used properly with other trend analysis tools can help you get the advance indication about the movement in the stock. One such perfect indicator is open interest which can be followed to make money in the market.
- An increase in open interest (OI) in a situation of rising prices confirms an upward movement.
- A decrease in OI accompanied by a decrease in prices indicates a falling market.
- An increase or decrease in prices while OI remains flat indicates a likely trend reversal.