Sudarshan Sukhani of Technical Trends said the markets are in an intermediate trend at present. Although there has been a 45% rally from the earlier lows that the markets saw six days back, it still continues to be a bear market, he added.

Sukhani feels that the markets are getting overbought and that they will soon begin to consolidate and fall. He feels there is resistance at 3,300-3,200 levels. He said that even if the Nifty opens on 3,300, it will still be a bear market. Thus, he feels that traders need to be careful of long positions and taking profits.

Here is a verbatim transcript of the exclusive interview with Sudarshan Sukhani on CNBC-TV18. Also watch the accompanying video.

Q: Do you think the Nifty targets need to be revised upward or you would start getting careful?

A: This is an intermediate uptrend. So, in an uptrend one buys on dips. Now the key question here is that we have seen a 45% rally from the lows that were made just six days ago. So, is the market getting overbought? The answer is yes, we are close to resistance. Probably, worldwide we are close to the area where the markets will begin to consolidate and even start falling.

Therefore, traders have to say there maybe some more momentum left in the rally, nobody can say how much. But one starts taking profits. So we have the first range around 3,200-3,300, which will give resistance then at 3,500 and then at 3,800, there is resistance all along. Thus, I would start being careful.

Just as we went on the excessive irrational pessimism on the downside, we are now hearing the same voices saying things are up, but no, they are not. This is a bear market. The Nifty, even if it opens higher, will be at 3,300 that is not a bull market.

Therefore, traders have to be very careful now of long positions and also of taking profits.