It was a volatile expiry. Prices rallied off the first five minute low and headed to a higher high compared to the earlier day. Maybe it was short covering, maybe it was big buying from govt Institutions (under instructions?) but it did manage to carry market higher, dissolved the panic and maybe got some buying back in. But before one could lean back a bit, the indices sold off from the highs and the day finished somewhere in the middle of the range. This leaves us a bit perplexed about how to read the data.

The shorts at 25000 Ce is back while put sellers line up at 24800-700 area. Now that we are back in the price range that I had indicated earlier and bounced from there, it could be considered that the bigger trend (which is buy-the-dips) is being reaffirmed. Had the market closed near the highs, the downtrend of the short term may have got challenged. But it gave up much of the gain by close. So, that short term trend is still a question mark.

FII index short position reduced a bit, dropping to 1.37L contracts but that is still a large amount to start the new month with. Prices are still near the well tested support zone near 24600-650 and if this breaks then trend calls would change for the worse. So, that is now a very firm stoploss level for long position holders. It can even change the trend to a intermediate term decline and so greater attention is required here.

For recovery, the levels still remain the same- get past 25100. That will take the prices past the consolidation area where it has now been arrested. Breadth yo-yoed yesterday and needs to steady up and turn to up for upmoves to sustain.

These are, ideally, watched on Neotrader dashboard, along with the Active stocks list. Notice one glaringly evident thing on this table. The WellSet Bear lists have high Aging scores, meaning that the downtrend is many of them are still persisting while the Bull list is composed mostly of new entrants (score 1 mostly). This sets the bias very clearly towards some more retests of the bulls resolve to hold the supports. Expect volatility therefore.

Don’t be swayed by levels today- watch the trends and watch the breadth, for, this is more important. These days, almost every YouTube video analysis is full of levels and most of them revolve around the same area. More important for us to catch turns or directional moves than levels. While levels are important by themselves, they are subject to the overall trend status of the market.

Keep a stop below today first 30min low if long. Fresh short signals shall emerge only if there is a break below yesterday low area.