F&O stocks: Sun Pharma, Vedanta among 5 stocks with short buildup
trading session, the following five stocks witnessed a build of fresh short positions. Let’s first understand how this conclusion is reached whether the stock has seen a buildup of fresh short position or not.
To understand it we have to look at what “short selling” means. When a trader is expecting the stock prices to fall, he may sell the stock without owning that and buy at a lower price, for example, stock XYZ is trading at 100, a trader sells the stocks at Rs 100 and buys it back at Rs 90. He made a profit of Rs 10. Selling the stocks without owing the underlying stock is called short selling.
Coming to the buildup of fresh short positions, When the stock prices move downward and open interest on the counter increases, it is taken as a sign of a short build-up. The signal is considered more reliable if the volume on the counter has also seen an increase as the stock price was declining.
Vedanta dropped by 3.51%, and the open interest saw an increase of 4.1%.
Sun Pharma fell 3.3%, and open interest saw an increase of 19.15%.
NMDC declined by 2.95%, and open interest saw a rise of 5.62%.
MFSL price fell by 2.24%, and open interest saw a rise of 2.79%.
Hindalco's stock price declined by 1.85%, and open interest saw a rise of 1.77%.
Also Read: F&O stocks to buy today: HUL, BEL among top 6 trading ideas for 23 May 2024
Some additional checks would help traders make better trading decisions as they increase the probability of a follow-up of the upward movement in the stock price.
First, if this long
