There are a few things to keep in mind though: The first counter-signal that I see is coming from forex markets - With renewed strength in the equity markets - US Dollar should be getting murdered by currencies like Australian Dollar and New Zealand Dollar - which doesn't seem to be happening at the moment. The second counter indication is coming from Bond markets which should be getting sold-off the cliff with so much strength in equities - again this is missing at the moment and at best there seems to be some half hearted attempt to sell Bund and T-Notes - but no fresh lows for the time being at least. Another strange indication is the weakness in soft commodities like Soybean Meal & Wheat . These markets took support along with equities in March: however, the rally in these markets stopped in the beginning of June and Wheat made fresh lows after that.
To sum up - there are plenty of inter-market signals which make the strength in equities a bit difficult to understand - but to generate any serious short-interest - Nifty would have to close below 3900 - something which looks quite improbable at the moment. For the time being - we just have to play this market on a very short term basis and roll with the momentum.
All the best for your trading!