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Nifty closed a tad above 13,500 on December 11 with weekly gains of nearly two percent.

During the week gone by, markets reached yet another milestone of 13,500 with ease as few heavyweight themes did well to guide markets to new record highs.

We have now reached the extreme zone, at least for the current vertical move. In a broader view, 14,000 and beyond levels are very much possible, but for the time being, 13,500-13,600 are the extreme levels as per the few key Fibonacci ratios.

The 'Golden Ratio' (161 percent) on the 'Price Extension' of the recent up move is placed at the current levels. This level coincides with the 200 percent ‘Price Extension’ of the first up leg from March lows.

If we connect all important highs from March 2015 on the monthly chart, we can see a multi-year upward sloping trendline precisely converging around the same levels.

Some cooling off around this crucial junction cannot be ruled out.

We agree with the fact that a strong trend, up or down, doesn't necessarily follow any theory, but there is no harm in being a bit conservative at times.