The market looks quite strong if you look at the major indices. Short term traders can continue to play on the long side till such time the Sensex falls below 15112 and the Nifty falls below 4435. However, that is quite far from current levels.

What is somewhat disconcerting is the sell-off we saw in the broader market during the second half of last Friday while the key pivotals continue to surge ahead to prop up the major indices. The gaps in the Sensex: first between 14520 and 14574 and then on last Friday between 15112 and 15216—suggest heady momentum in the market.

Earlier, we had been giving July targets for the Nifty between 4460 and 4525. Now, we are already in the target zone, what should be our next course of action? If the Nifty, for any reason, fails to sustain above 4525 then start reducing speculative long positions in the market. If it moves beyond that and sustains there then we have to look at the next momentum rally target of 4585.

The large cap market as represented by the major indices does present a picture of being a bit top-heavy but till such time it decides to come down and consolidate we have to continue with the uptrend.