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.
When the stock prices move up and open interest on the counter also moves upward, it is taken as a sign of a long buildup. The signal is considered more reliable if the volume on the counter has also seen an increase.
The Nifty Bank witnessed a volatile trading session and now a breakout on either side will dictate the trend. On the higher side, crucial resistance is placed at 49,300, while on the downside, crucial support is placed at 48,400 levels, suggest experts.
When the stock prices move downward and open interest on the counter increases, it is 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 declines.
During the day, the banking benchmark scaled a fresh record high of 49,473. ICICI Bank, Axis Bank, and SBI also hit fresh 52-week highs in intraday trade. AU Small Finance Bank closed with gains of over 6%, while ICICI Bank gained more than 4% and SBI ended over 3% higher.