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» When to buy and when to sell on a stock investment ?: Guiding signals ..!
When to buy and when to sell on a stock investment ?: Guiding signals ..!
There are two types of stock market investors. A long-term investor is one who examines the growth of the world and the country, the future growth of the company, and the profit margin of the company and selects the role for the investment. Another is a short-term investor. How much is the demand for a stock? Will look at how much supply (supply) is and invest in techniques.
These short-term investors and traders (traders) know what is going on in the derivative (futures and options) market and what signals they are emitting so they can reduce losses and make a profit if they invest in the stock market or sell stocks.
Open Interest
The total number of contracts pending in the Futures and Options (F&O) market is the number of unfulfilled contracts at the end of the trading day called open interest.
Stock Price Rise, Volume & Open Interest Rise ..!
Open interest for a particular stock is high in the F&O market. At the same time, the share price is rising. Also, if the volume (number of shares traded) rises, the number of people investing in that stock increases.
In particular, it means that more and more new people are investing in that particular stock.
The share price may rise in the short term as more people are making long term investments in that stock. The complexity of buying that particular stock can take the rise in share price and the increase in the number of Open Interest & Volume.
Stock Price Rise & Value, Open Interest Decline ..!
If the number of open interest decreases it means that the investment is out of that particular stock. And the reason for the increase in the price of that particular stock means that short covering is happening. That is, the stock price increases as traders buy and sell (short selling) shares.
At the same time, the number of open trusts is declining as contracts close. If the volume also decreases, the problem of selling that particular stock can be taken as the increase in the share price and the decrease in the number of open interest, volume.
Stock Price Decline & Open Interest, Volume Increase.!
As short positions in the stock i.e. short selling increase the share price decreases and the number of open interest and volume increases. In this case the specific role has gone into the hands of the bear.
This means that the share price is going to go down after this. The stock price will see a decline until investors enter a short position. This can be taken as a signal to sell a particular stock and exit.
Stock Price, Volume & Open Interest Low!
If the number of open trusts is declining while the stock price is declining, it means that the stock price is going to return to the ups and downs after a temporary downturn. Decreased open interest means no new short selling. Also, if the volume goes down, this can be taken as a signal to buy a particular stock.
Put - Call ratio
This is a useful indicator to know the overall sentiment of the stock market
Put to Call Ratio. The put-to-call ratio is the value of the total put options traded on a given day, divided by the value of the traded total call options on the same day.
If the put-call rate rises ..!
This put-call ratio
An increase means that traders are putting more money into put options than call options. This can be taken as a signal that the share price is going up.
put - call ratio decreases
This put-call ratio
Decreasing means traders are putting more money into the call options than the put option. This can be taken as a signal that the stock is going down.
The above buy and sell strategies are for short term investors and traders. Long-term investors should look at the fundamentals and techniques of company stocks and make investments.
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