Bulls roar on Dalal Street! Will the run continue?

It turned out to be a marvelous Monday for investors on Dalal Street as the BSE Sensex jumped 935.72 points or 1.68 per cent to settle at 56,486.02.
 
Similarly, the broader NSE Nifty climbed 240.85 points or 1.45 per cent to settle at 16,871.30, aided by heavy buying in banking and IT sectors along with a decline in oil prices.
 
"We are gaining traction as strategy is shifting from tactical sell to tactical buy. Investments are chipping in as commodities prices are reverting. FIIs selling and crude prices are subsiding, which is expected to continue based on diplomatic developments and provide an edge to the domestic market," said Vinod Nair, Head of Research at Geojit Financial Services.
 
"Globally, investors are bracing for rate hikes as expected. Domestic WPI has spiked up however, the market is ignoring as future prices can get gloomy," he added.
 
Santosh Meena, Head of Research, Swastika Investmart Limited said, "Indian equity market kicked off the week with a strong note where Nifty manages to close above its 20-DMA after February 2. Indian equity markets outperformed most of the global peers in today's trading session."
 
He noted that the rally can be attributed to some positive news flows on the Russia-Ukraine issue, cool off in crude oil prices, the expectation of only a 25 basis points rate hike by the US Fed, lack of selling by FIIs, and buying by DIIs. The news flows related to the Russia-Ukraine issue will continue to cause volatility while we will react to our inflation numbers tomorrow.
 
Sharing his technical view, he said that Nifty managed to close above the important resistance zone of 16750-16800 where 200-DMA of 16975 is an immediate and critical hurdle; above this, we can expect a short-covering rally towards 17300  level otherwise we can again expect some selling pressure. On the downside, 20-DMA of 16740 will act as immediate support while 16500-16400 is the next support zone.
 
"Banknifty outperformed in the leadership of HDFC Bank however 35750-36000 is an immediate and critical resistance zone; above this, we can expect a short-covering rally towards 36500/37000 levels. On the downside, 35000 is immediate support while 34300-34000 is the next support zone," he added.
 
"Technically, Index has formed a bullish candle on the daily chart as well as given closing above 21 -DMA which suggest strength in the counter. Furthermore, the Index has given a breakout of the falling trendline which points out northward direction in the counter," said Palak Kothari, Research Associate, Choice Broking.
 
"Moreover, the index has given closing above 21& 50 HMA which adds strength to the price. Momentum indicator MACD is trading with a positive crossover which adds strength for the next day. At present, the index has support at 16,500 levels while resistance comes at 17,000 levels, crossing above the same can show 17,200-17,300 levels. On the other hand, Bank nifty has support at 34,600 levels while resistance at 35,800 levels," Kothari added.