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Nifty reached the magical figure of 16,000 in the week ended August 6.

Barring the muted session of August 6, the Nifty had an excellent week, gaining 3 percent and moving towards the 16,300 mark.

During last week, the benchmark index had a smart recovery from the lower range. Nifty Bank cooled off marginally towards the fag end of the last week.

All eyes will be on this index because any sustainable move beyond 36,200 would result in an extension of its rally towards its record high.

This will certainly bode well for the bulls as we may then see Nifty reaching or even moving beyond the next milestones of 16,400 – 16,500.

Although the upward trend has resumed after a long consolidation, we would advise short-term traders to start lightening up positions if Nifty reaches 16,400 – 16,500 levels in the coming days.

Prices have now started moving far away from some key moving averages on the quarterly timeframe charts.

We are not at all advising to go against the current trend, but at least taking some money off the table on existing positions is a good ploy.

As far as supports are concerned, 16,200, followed by 16,000 are likely to be the key levels for the benchmark index, whereas for Bank Nifty, support is visible around 35,500 – 35,200.

Momentum traders are advised to take one step at a time and follow proper risk management.