Today price action cannot go without being commented upon. The open was worser than the worst in a long time! That itself was something. The initial pullback was no unexpected as those what were short on the options side or futures, used the gap to lock the money in. But that was about it. The environment remains negative not just locally but globally and so no big buying would have really emerged. That would have been too much to expect. Importantly though, the next sell off that occurred, could not take the market lower and that was the first of the signals that some repair would be applied. And so it was, as price recovered slowly to trade into the gap. Much to do before this wide gap gets filled. Until then it will act as a resistance to all future attempts to rally. But today we will live with this.

There is still sizable Put shorts at 22000 strike and only a small part of it was covered yesterday. Higher shorts were squeezed though. Dont see any new additions in Puts. Calls got added though and that betrays a lack of bullish expectations. So, higher levels, if seen, will produce some supply in the Nifty. In Bank Nifty, despite a good chunk of short liquidation of 50000 Pe, there is still a lot of position left there. So, potential for a squeeze exists. Some of those shorts were rolled down to 49000Pe. The Nifty PCR at 0.58 is highly oversold. So, fresh shorts if any should only be on rallies.