Increase in Open interest indicates inflow of fresh money into the market and a decrease in open interest indicates outflow of money from the market.
When the price of a particular script goes up with the increase in Bullish options open interest(indicated by Blue line) and
when the price of a particular script goes down and the Bearish options open interest(indicated by Red line) increases alongside the price at a certain level then we can expect that the price movement is going to sustain in both the cases. On the opposite hand, when a trend is present in the market and a sudden fall in open interest(bearish or bullish OI ) is visible then we should be doubtful about the trend. There can be chance of reversal of the current trend.
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