Even as Nifty trades near fresh lifetime high, technical analysis experts say that while the index is poised to touch new lifetime high levels soon, the rally may be short-lived. “I think the Nifty is going to take out a new all-time high. The consumption basket in interesting from a bullish perspective,” veteran technical analyst Martin Pring told Financial Express Online on the sidelines of CMT India Summit held in Mumbai. Notably, the Nifty touched a new peak of 12,132 against its previous high of 12,103 on Tuesday. Experts point out that the index must close above this level of 12,103 for the index to make a sustainable breakout. “Until that happens, as of now, we have met a classical Double Top Resistance and may see this pattern stalling the rally for some time and cause Nifty to consolidate a bit more,” Milan Vaishnav, CMT, MSTA told Financial Express Online.
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According to Mayuresh Joshi, Head-Equity Research at William O Niel India, the markets are in a state of a ‘confirmed uptrend’. However, if the number of distribution days, which stands at 2, goes upto 4 in the coming 2-3 weeks, the markets can start to come under pressure. “Distribution day refers to a situation wherein the index falls by 0.2 per cent or higher in a single session, as compared to the previous session,” Mayuresh Joshi explained in his talk during CMT Summit.
Inorder for the rally to sustain, the index has to take out the all time highs and close above it with heavy volumes to justify a further upmove, he said. “On the other hand if the index breaches its 21DMA support then one can expect to find support near the 50DMA. In this case, Nifty needs to cross 12,103 with heavy volumes and close above it to fuel a further rally,” Mayuresh Joshi said in an interview to Financial Express Online.