NIFTY – Markets rose yesterday, to complete the minute wave iii (encircled and green. To distinguish AND EASY TO UNDERSTAND I have given different arbitrary coloring for different sections). This sudden spurt upward is seen as short covering (These types of short coverings will always occur in a strong bull run)
Now we should in all probability correct as shown above to levels as indicated.

NIFTY – ABOUT SHORT COVERING

This occurs when traders who had previously SOLD short positions(or selling puts), decide to buy back those positions to close them. This is simply to secure a profit on their short positions.
The put call ratio will rise and it is on the basis of this high ratio that when the markets begin to rise even though highly overbought, the traders in the know who have sold the puts in the 1st place begin to unwind or book their profits. This results in short covering and gives impetus to the markets ending in a near frenzy on the charts. (yesterday just before the rise it was 2.1 or twice as many puts were sold as calls. )