Nifty gained more than 100 points on August 2 on strong global cues to close at 15,885, its highest close since July 16.

The index broke out from the downward slopping trendline yesterday, adjoining the highs of July 16 and July 26.

It also filled the entire gap created on July 19. The benchmark index has resumed its uptrend and the possibility of it crossing 16,000 this time is very high.

On the derivatives front, we have seen Put writing at 15,600-15,700 levels. The 50-day exponential moving average (EMA) is placed around 15,600 and this level will act as strong support.

Traders should remain bullish and accumulate longs with the stop loss of 15,600 on a closing basis.

On the higher side, once we cross the 16,000 level, Nifty may go to 16,300-16,400 levels in the coming weeks.

Nifty Midcap and smallcap indices have broken out on the daily chart to close at all-time high levels.

This year, they have outperformed by rising by 36 percent and 50 percent, respectively, against a 14 percent rise in the Nifty.

We expect their outperformance to continue for the coming weeks and months also. Therefore, the focus of the traders should be on mid and smallcaps for higher returns.