Can I upgrade a itouch IOS 4.2.1 to a newer IOS

Depends on which ipod touch.

2nd gen can only go to 4.2.1

Identifying iPod models - Support - Apple

If it's a second generation iPod touch, no.

Apple didn't upgrade the 8GB model's hardware when it released the third generation ones.

If it's a fourth generation iPod touch, yes.

(83653)

You never told us exactly what model iTouch you have but guessing from your question I would bet it is to old to upgrade beyond 4.2.1

Allan