Nifty Futures started its liquidation phase since the start of Karnataka election results. Clients are liquidating their major long positions and parallelly PRO+DII+CLI also exiting their shorts positions. Most of those long liquidations so far resulted in a net negative trend.
In the financial markets, often a set of market participants keep on adding long inventory of a particular trading instrument during bull markets (long inventory pile up phase) over a period of time. At times the long inventory goes to the extreme which is often followed by the liquidation of those piled up inventories (liquidation phase). It is a trading good practice to understand which participants are piling inventories and who in the markets are cutting down their inventories.