The NSE Option Chain chart for stocks above shows open interest data for stock options that are trading on NSE India. The total open interest of Puts and Calls is visible for each strike price for that particular stock.
The charts can be used to identify the support and resistance levels based on Open Interest data. Generally speaking, the strike price with highest OI of Calls is considered a resistance. Similarly, the strike price with highest Open Interest of Puts of considered a resistance level for that stock.
If a particular stock has a market cap of INR 1 Trillion and OI is just ten thousand then the Open Interest data should not be used to identify levels for that particular stock.
Also, if the stock is in sharp uptrend or the momentum is very strong, the trader should not rely on support and resistance from these charts. The major supports and resistances get broken during strong up or down moves.
The charts should not be relied upon for the stocks where the open interest is very low. The higher the open interest of a particular stock, the better.
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