I am new to stock market and would like to study charts for making trading decisions.
I would like someone to enlighten how to identify that a rally is due to Short-covering. How can we identify a rally is due to short-covering and a rally is due to fresh buying/long positions.
I am new to stock market and would like to study charts for making trading decisions.
I would like someone to enlighten how to identify that a rally is due to Short-covering. How can we identify a rally is due to short-covering and a rally is due to fresh buying/long positions.
Rise in Prices + Decrease in Open Interest --> Sort Covering
Rise in Prices + Rise in Open Interest --> Fresh Long positions
Fall in Prices + Decrease in Open Interest --> Profit booking
Fall in Prices + Rise in Open Interest --> Fresh shorting