Apart from IT, no other sector has helped market get close to 12,000: JM Financial’s Gautam Shah

The market rallies must be seen as selling opportunities given that the upside for the near-term looks limited, said Gautam Shah, director and chief technical analyst, JM Financial.

“This market will find resistance at higher levels and it will be difficult for Nifty to sustain beyond 12,000 levels and if at some point Nifty breaks 11,600, which is our view, chances of 4-5 percent dip is likely. So, rallies must be used as selling opportunities," he said, in an interview with CNBC-TV18.

“We have been trading in this band - 11,600-11,850. I am tempted to believe this is more of a distributive phase because there are a lot of cracks in large-cap names and at levels of 11,800-11850, the risk-reward is not justified to go long,” he added.

He said the Bank Nifty is an important index to monitor and if 30,500 levels were to break, it could open a 5 percent dip for that index. "Within the Bank Nifty, the top 3-4 private banking names have started to look overbought after a long time," he said, adding that it would be advisable to book profits in them.

According to him, there are a lot of pressure pockets in the market. There is very limited leadership on the way up and apart from IT index, there is no other sector that has helped the market get close to 12,000. The three sectoral indices- banking, FMCG, oil and gas are all negatively placed and are setting up for some sort of weakness, he said.