For a change, the market behaved in line with expectations. Nice high finish for indices and for the next expiry, continued shorting of Puts.25500/57000 are the big position strikes. Shorting of Calls (monthly) was directly in the 26000 strike. So some to and fro around 25500 may be possible as option players jostle for control.

The most telling data for the day is the big closure of Index short positions by the FIIs. In one swoop, their net shorts came down from 1Lac + contracts to 34000+ contracts only. They were also buyers in cash side. This is what drove the rally of yesterday all thru the day.
Pro accounts and Client accounts largely squared up their longs as well at the expiry. So, one could say that the market is now somewhat denuded of both favorable and unfavorable positions. Hence chances are that we may see some oscillations within a small range today rather than trend big time as direcional position have to get built afresh.

The daily CPR shows 25400 to be the important level for long holders for a stop. 56900 for BNF. Both levels on spot indices as premiums may vary on day one of new series. These can be the first of the stops. So long as these levels are held, dont bother about shorts. For upside, so long as price are above 25500/57100, then can continue the longs. Additions should be done during declines only.

With GDP data coming a bit soft in the US, rate cut expectations would rise again and this should buoy up the US markets. Therefore, handovers overnight may be largely positive and that may lead to continued gap up opens! Not that this is too much of a good thing because, such gaps take away the gains for day traders and only those with overnight positions may benefit. But the way markets are currently, will it now become worthwhile to carry longs overnight? Perhaps.

Between the indices it still seems to me that the BNF is much better poised on the charts to move further higher. So, I would suggest being a buyer on dips in that index until this evidence changes. This of course doesn’t mean that the NF will continue to underperform. Just that it is the situation now. So just track a ratio chart of BNF vs NF.

A quick break below morning one hour low would signal a ranging market for the day. If dips occur to prior support zones, buying shall emerge. So, suggest waiting for such dips to buy