The fierce upmove late today has taken everyone completely by surprise, but as usual, I am a bit cautious.
I am not sure that the rise was due to action by bulls, and would like to think that this rise was purely due to short covering. How else can one describe ICICI Bank cash on NSE which was trading near 850, suddenly jumping to 890 for a brief moment and within minutes, the high registered was 927.6 !! The volumes in that 1 minute bar when ICICI Bank jumped from 850 to 890 were 2,22, 180 shares! Why would any bull buy at this rate, in such a big quantity? Was it plain short covering? Moreover, the 840 September ca never went above 20-22.
Keeping all this in mind, I feel the rise today was only engineered by bears (short covering).
I am reminded of a similar event in July 2007, when on the last day of that settlement, Nifty had closed near highs, 4624 and on the first day of the August 2007 settlement, market had crashed (Nifty was down 3.8%).
Are we in for something similar tomorrow, well, I would not be surprised.
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