The market took a breather in the last few days after a hefty rally seen during the last few weeks. The Nifty traded in a tight range during the last five trading sessions.

The intermediate uptrend remains bullish as the Nifty continues to make higher tops and higher bottoms over the last several months.

Nifty has been trading above the 20 and 50-day exponential moving average (EMA) which gives further evidence of an uptrend.

With intermediate and long-term momentum readings like the 14-week and 14-month RSI in rising mode and not showing any signs of negative divergence, we expect the uptrend to continue.

In the Options segment, Put writing was seen at 17,000-17,200 levels. During the last correction, Nifty has found support around that level and bounced back.

This level also coincides with the 20-day EMA which is currently placed at 16,950 odd levels.

Therefore, we believe that the short-term trend will remain intact till Nifty is trading above 16,950 levels.

After the sharp rally of nearly 1,500 points in the Nifty during the last few weeks, it is possible that the index may consolidate in the coming days.

However, there is a lot of opportunity in the mid and smallcap stocks we believe.

During the last five days, while Nifty remained in the narrow range, broader market indices outperformed as they gained up to 3 percent.

We believe that one should focus on mid and smallcap stocks for higher returns from hereon.