PUT CALL RATIO
The ration of the Put trading volume
divided by the Call trading Volume. i.e. A Put/ Call Ratio of 0.78 means that
for every 100 bought, 78 Put were bought. It is a contrary Indicator. A Reading
of 1.0 or more is very bullish as most of the people thinking market going
down. When the majority think that market is going to move a certain direction,
it is usually does opposite.
OPEN INTREST
Open
Interest is the total number of outstanding contract held by market participants
at the end of the day. Alternatively, it is the total number of futures
contracts that have not yet been exercised (squared off) or expired.
Open
interest indicates the trend in the F&O market and measures the flow of
money into the futures market. The open interest position represents the
increase or decrease in the number of contracts for a day, and it is shown as a
positive or negative number.
When open interest is high at a market
top and the price falls off dramatically, this scenario should be considered
bearish. In other term, this means that all of the long position holder that
bought near the top of the market are now is a loss position, and their panic
to sell keeps the price action under pressure.
HANGING MAN
A Bearish candlestick pattern that forms
at the end of an uptrend. It is created when there is a significant sell of
near the market open, but buyer are able to push this stock back up so that is
closes at or near the opening price. Generally the large sell-off is seen as an
early indication that buyers are losing control and demand for the asset is declining.
HAMMER
A price pattern in candlestick charting
that occurs when a security trades significantly lower that its open, but
rallies later in the day to close either above or close its opening price. This
pattern forms a hammer-shaped candlestick. The Hammer formation is created when
the open, high and close are the same price. Also, there is long lower shadow,
twice the length as the real body.
The
long lower shadow of the Hammer in down trend
implies that the market tested to find where support and demand was located.
When the market found the support, the lows of the day, bull began to push
price higher, near the opening price. Thus, the bearish advance downward was
rejected by the bulls.
DOJI
The Doji is a powerful Candlestick
formation, signifying indecision between bulls and bears. A Doji is quite often
found at the bottom and top of the trends and thus is considered as a sign of
possible reversal of price direction, but the Doji can be viewed as a
continuation pattern as well.
The
doji is notable for its small body found in the middle of the candle, with
wicks on either side. The picture below illustrates the Doji formation.
During the formation of this price moved higher and prices moved lower, but ended up closing very close where they had opened.
Fact is that no formation, no indicator,
no trading steps offer 100% accuracy. So, traders are best served by assuming
that future price action is unpredictable and setting their trades up so that
wins may benefit them more than losses may hurt them.
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