Thakkar said that the frontline indices had traded within a range, while the broader market continued to outperform, with the Nifty Small Cap Index and Nifty Mid Cap Index hitting lifetime highs. He said this indicated positive market breadth and made a case for an upside breakout in the frontline indices. Thakkar noted that the Nifty had been trading in the 24,000-24,600 range for quite some time, while the Bank Nifty had been moving between 57,000 and 58,500 levels. He said the Bank Nifty had recently outperformed the Nifty and had a higher chance of breaking out first due to short covering. He added that FIIs had increased their index shorts by almost 60,000 contracts, while the banking sector had also witnessed an increase in shorts. According to Thakkar, this could pave the way for an upside breakout through short covering.
