Bulls roar on Dalal Street! Will the upside momentum continue?

On Tuesday, the Indian equity indices logged their best single-day gains in three months, propelled by heavy buying in metal, energy and banking stocks amid a global rally in stocks.

The 30-share BSE benchmark zoomed 1,344.63 points or 2.54 per cent to settle at 54,318.47 points with all of its constituents closing with gains. During the day, it jumped 1,425.58 points or 2.69% to 54,399.42.

The broader NSE Nifty rallied 417 points or 2.63 per cent to finish at 16,259.30 points. All the 50 stocks advanced led by steel and energy stocks. Will this upside momentum continue? Well, here's what experts say!

"A ferocious up-move from the metal index lifted Reliance together with other sectoral indices leaving bears gasping and covering short positions and looking out for reasons for the rally," S Ranganathan, Head of Research at LKP securities said.

On a day when WPI for April crossed 15 per cent, the over 2.5 per cent rise in benchmark indices coupled with the breadth of the rally surprised many on the street despite the movement coming after a relentless fall, Ranganathan added.

Palak Kothari, Research Associate, Choice Broking said, "Nifty has given a breakout of the horizontal line which suggest buying from lower levels. In addition, Nifty has been sustained above 21& 50-HMA which indicates Northward direction for the upcoming session."

However, she noted that the momentum indicators RSI & Stochastic were trading with a positive crossover and reversed from the oversold zone which is a sign of reversal in the Nifty.

She further added that the Nifty may find strong support around 15,800 levels, while on the upside 16,400 may act as an immediate hurdle for the Nifty crossing above the same can attract fresh buying. On the other hand, Bank nifty has support at 33,800 levels while resistance at 35500 levels.

Sharing the technical view, Mohit Nigam, Head - PMS, Hem Securities said that the key resistance levels for Nifty 50 are 16,500 and on the downside 16,000 can act as strong support. Key resistance and support levels for Bank Nifty are 34,800 and 33,500 respectively.

Also read: Investors richer by over Rs 12 lakh crore as markets record sharp gains

Also read: BofA slashes Nifty target to 16,000 by Dec on inflation, rate hike concerns