Before anything, please follow this advice:
Please use the tool after 3.30 PM on any market day for predicting trends. Day traders can use it after 2 PM after meaningful volumes have built up.
Technical analysts say that volume always precedes price action and that is why technicals are more important than fundamentals (which represent figures of the past).
They are right, Technicals are actually more important when it comes to predicting trends.
There is one factor that is more important than technicals. In fact, this factor is akin to a leading indicator of forthcoming technical action.
This factor is open interest.
In the NSE Futures and Options segment, investors can pick up shares in bulk by paying a small margin.
For example, if you figure BHEL will trend up, you can buy the 31 Aug CE of 150 at a mere 5 bucks (5,000 shares make 1 lot). So, by investing Rs 25,000, you are effectively creating a buy position of Rs 7.5 lakhs! Then, you can keep rolling over the position (squaring by expiry and then buying afresh).
So, an institution that wants to buy or sell a huge quantity of stocks will typically operate both in the F&O and the cash markets. They may also use options as a hedging strategy (buy in cash market and sell in options market (by buying put options) to hedge against a fall).
I have created a tool, a TREND PREDICTOR, that calculates open interest trades to predict which way stocks and indices will move. It shows you where smart money is headed to. I have tried it by taking positions and my trades were profitable (Britannia, Manappuram) but KNOW THAT you are responsible for your decisions and so do not take the results thrown up by this tool as a recommendation.
Here is a tutorial on how to use it (please follow the captions):
Before the tutorial, know that THIS TOOL MUST BE USED ONLY AFTER MARKET CLOSES AND DATA IS UPLOADED BECAUSE IF INCOMPLETE DATA IS FED INTO THE TOOL, IT WILL GIVE A FALSE SIGNAL.
Finally, remember that these predictions can swing either way depending on news, economic factors, black swan events, etc. Though I have followed best forecasting practices while creating this tool, I suggest you must do your own research and consult your broker before taking positions. I also suggest you to mock trade for a few days to judge whether this tool works and then make your own decision.
ALL PREDICTIONS OF THIS TOOL ARE LARGELY SHORT TERM.
Image taken from CNBC.