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Nifty managed to hold above the previous swing low of 15,566. It closed at its new all-time high on June 14.

Bank Nifty ended the session with a bullish hammer candlestick pattern on the daily chart. It found support on the upward sloping trendline, adjoining the daily lows of April 22 and May 14, 2021.

Nifty Midcap and small-cap indices also managed to hold above important support levels.

As far as Nifty's upside is concerned, it may reach the target of 16,000-16,200 in a short span of time. The support would continue to be at 15,566 on a closing basis. Bank Nifty should be held long with a stop loss of 34,374. Upside targets for Bank Nifty are seen at 35,810 and 36,500.

Bank, auto and realty indices, which have not contributed to the recent strength of the Nifty, are expected to see sharp short-covering in the coming days.

The sectors which have been outperforming and still can do well are power, PSU and capital good space.

From the mid-cap segment, auto ancillary, metal and IT stocks should be kept on the radar for short to medium-term gains.

Though bulls are completely dominating the current market trend, we should not get carried away, as more than 94 percent of the NSE500 stocks have now reached above their 200-day moving average and if we were to go by the historical bull market rallies, this number suggests extreme and mean-reverting breadth from the overbought zone.

Nifty Smallcap index has surged two-fold from the March 2020 bottom. So from here, stock selection should be done very carefully and fresh trades should be taken with appropriate risk management strategies.

Stop-loss in trading positions should be kept on a trailing basis.