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Future Open interest gives a glimpse of a what is market sentiment for the day.
Sentiment indicators are market psychology-based tools that measure how a group perceives the market or economy. They predict how current beliefs and positions may impact future market behavior. These indicators analyze bullish or bearish market actors’ thoughts and feelings, helping predict investors’ future actions. When sentiment readings are unusually high or low, they may act in a contrarian manner, suggesting that market prices could start rising soon.
Sentiment indicators are tools used to analyze market psychology, focusing on investor or consumer behavior and beliefs that may influence the market. They help confirm trends when they move in the same direction, while extreme readings may cause traders to take a contrarian view. They are used to analyze trends, assets, and the economy from the perspective of participants, rather than just examining an asset or data point.
Sentiment Indicators vs. Technical Indicators
While some sentiment indicators will also fall under the heading of a technical indicator, or vice versa, sentiment indicators are meant to show how consumers or investors have positioned themselves—or what their current beliefs are about the economy or market.
A technical indicator is a broad term used to describe formulas that manipulate the price or volume data (and sometimes other types of data) of an asset to provide a different perspective on what is happening on a price/volume chart.
Future Buildup gives a glimpse of market sentiment
A short buildup indicates that more people are anticipating price decreases and creating short positions. This can be determined by examining price and open interest. If the price decreases and open interest increases, it indicates a short buildup.
Conversely, if the price and open interest increase, it indicates a long buildup, indicating a higher expectation of price increase. Both types of buildups can be identified by observing price and open interest trends.
To access short build-up, short-covering, long buildup, and long unwinding data, check the futures trend feature on Intradayscreener website. This feature allows easy tracking of long buildup, long unwinding, short unwinding, and short covering stocks, as well as OI gainers and losers.