The Nifty was fairly volatile on the FNO settlement day. The Index fell to a low of 4078 before recovering to close at 4107.
While the market remains inside a range, there is a suggestion that the Index finds support at lower levels. These levels are somewhere around 4070. The Nifty did go to touch this support today, but rallied to close higher.
If 4070 support holds, then we could be looking at a rally that touches the 4300 - 4400 zone. Assuming that the support breaks down, we are faced with another decline to 3800 where support comes in.
The scenario then is:
Assume the intermediate down trend is getting over. Look for a rally to 4300 - 4400 levels. If the support at 4070 breaks down by a close below it, then stay away from long positions.
With all of this analysis, the Nifty remains inside a large trading zone - between 3800 and 4650. Eventually, a move out of this zone will determine the long term trend for the Market.