NEW DELHI: Nifty50 on Tuesday hit a fresh record high as it entered deeper into the overbought zone. The index has been seeing gap-up openings in the last couple of sessions. With the support shifting higher, the index has been making higher high and higher low formations for six sessions.

Even as the index has risen for seven straight sessions, there are chances that the index may scale towards 12,850 level. That said, the short-term rally has reached a mature stage and a minor correction cannot be ruled out, said analysts.

For the day, the index closed at 12,631.10, up 170.05 points or 1.36 per cent.

“While traders can continue to ride the trend, they need to keep an eye on the near term support zone of 12,500-12,470 for Nifty,” said Gaurav Ratnaparkhi of Sharekhan, who believes that the NSE barometer is headed towards 12,850.

Aditya Agarwala of YES Securities sees a temporary pause in the uptrend. He said that the RSI has reached the extreme overbought territory on the shorter time frame and the index has also seen negative divergences, which confirms that the ongoing uptrend is reaching a matured stage and can undergo minor corrections.

Check out the candlestick formations in the latest trading sessions

“A sustained trade above 12,620 could extend the up move to levels of 12,750-12,800. The immediate support exists at 12,530 level,” he said.

Rajesh Palviya of Axis Securities believes that if Nifty moves above 12,700, buying pressure would lead the index towards 12,900-13,000 levels. Shrikant Chouhan of Kotak Securities said that overstretched indicators are also a reflection of the strong grip of bulls on the market. The analyst sees 12,800-13,000 levels on Nifty50 as a possibility.

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