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Nifty registered a new all-time high of 15,915.65 in intraday trade on June 28. However, the index failed to sustain at higher levels and witnessed a profit-booking thereafter.

For the last five trading sessions, Nifty has been consolidating in a narrow range of 15,700-15,900. This range needs to be taken out on a sustainable basis for the momentum to get back in favour of bulls.

Nifty Midcap and Smallcap indices are outperforming the Nifty.

The primary trend of the market is bullish, as the Nifty has been holding above its 10, 20, and 50 days moving averages.

Maximum Call open interest (OI) on the derivatives side stands at 16,500 while the maximum Put OI stands at 15500.

On the basis of this data, we can expect Nifty to reach a target of 16,500 if it takes out the immediate hurdle of 15,900.

Longs should be kept with a stop loss of 15,500. Below 15,500, Nifty would change its trend from bullish to bearish and till that happens traders should take stock and sector-specific bullish bets.

From the sectors, banking, IT and pharma are expected to do well from hereon.

Though bulls are dominating, we should not get carried away, as more than 94 percent of the NSE500 stocks have now reached above their 200 DMA and if we consider 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.

Nifty may hit 16,300 once the short-term hurdle of 15,900 is taken out. Short term trend of the Nifty would remain bullish till it holds above 15,500.