Section 3 · Module 3.3
Data & Sentiment Analysis
7 min readPrice: ↑OI: ↓
Short squeeze — bears buying back.
Open Interest (OI) Dynamics
- Long buildup: Price ↑ + OI ↑ — fresh bullish longs.
- Short buildup: Price ↓ + OI ↑ — new shorts.
- Long unwinding: Price ↓ + OI ↓ — longs exiting.
- Short covering: Price ↑ + OI ↓ — short squeeze.
Put-Call Ratio (PCR)
PCR = Total Put OI (or volume) ÷ Total Call OI (or volume)
PCR < 0.60: Contrarian oversold — bounce possible.
PCR > 1.40: Contrarian overbought — correction risk.
Volume Profile
POC: Price with highest traded volume — institutional fair value magnet.
HVAs act as support/resistance shelves; LVAs are thin zones price moves through quickly.
Knowledge check
Nifty rallies aggressively but futures OI drops significantly. What condition is this?