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Below the comment on Post Market comment by Sagar Shinde, Consultant from, Stoxkart - a discount broker

The remarkable ascent of NIFTY index has been dented by global market influences. The index has recently broken the trend line of its rising channel. There has been substantial call writing observed at critical strike levels, particularly at 25,600, with further activity noted at 25,700, 25,800, and extending to 26,000. This hefty call writing indicates that traders are becoming more cautious about the index's ability to maintain its bullish stance. In contrast, put writers have not significantly increased open interest, reflecting a prevailing lack of confidence among market participants.

This hesitation to sell puts, despite the market downturn aligns with the concept of cognitive dissonance, where traders struggle to reconcile conflicting information. They might be assuming that the downturn is temporary and that the market will rebound, making put writing unattractive, even though activity in the call options market suggest otherwise.

Compounding these factors, a sudden spike in the Indian VIX has emerged, which negatively impacts short-term market sentiment. The current market environment presents a fascinating case study of the interplay between technical factors and psychological biases. As the NIFTY navigates this period of uncertainty, it tests traders for emotional control, disciplined risk management, and a mindful approach to trading.

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