Скачать или смотреть 350-Point Intraday Reversal! | Short Covering Shock | Post-Market Analysis 12 Jan 2026

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In today’s Post-Market Analysis (12 January 2026), Safeer Sir breaks down one of the most dramatic intraday reversals seen in recent months — a session that perfectly captures why volatility, positioning, and psychology matter more than prediction.

The market began on a weak note, with Nifty collapsing over 250 points intraday, even breaching the 25,500 zone. This marked the third consecutive session of deep intraday damage, creating fear, panic, and forced exits in both long and short positions. Sentiment in the first half was clearly risk-off, with traders expecting further downside.

However, the afternoon session saw a violent reversal, driven primarily by aggressive short covering after positive US diplomatic comments towards India. What followed was a 350-point intraday rally, turning a deeply negative session into a positive close near 25,800. This was not a random bounce — it was a textbook reaction from an extremely oversold market.

Key indicators already warned of this possibility. The Put–Call Ratio (PCR) had dropped near 0.49, and with additional downside, likely approached 0.40, a zone historically associated with exhaustion selling and sharp rebounds. When markets reach such extremes, even a small trigger can unleash fast, unforgiving short-covering rallies — exactly what played out today.

Technically, the session avoided a fifth consecutive red candle and ended with a strong recovery candle, an important short-term development. However, Safeer Sir clearly explains that this move was not a structural bullish shift. There was no confirmed policy breakthrough, no trade deal, and no fundamental rerating — only sentiment-driven relief.

Volatility also made a strong comeback. India VIX spiked, option premiums expanded sharply on both sides, and expiry-week behaviour punished both early longs and late shorts. With the 15 January trading holiday now confirmed, time decay dynamics have changed, especially for Sensex options, making the next sessions even more derivatives-driven.

This video is essential for:

Intraday & expiry traders

Option buyers and sellers

Traders learning risk management in volatile markets


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