Oil stocks zoom, Nifty Energy index at H&S breakout

Indian benchmark indices opened on a positive note and continued to surge northwards as if for a bounce back after a pullback up to the multiple resistance turned support levels. Even Nifty Energy index which closed 1.6 per cent up contributed to the upsurge in the major indices. This is because the energy index holds nearly 14 per cent weightage in the Nifty50 index.

Reliance Infra and GAIL were the top metal index gainers and ended with 5.8 and 4.3 per cent gains, respectively. ONGC and Reliance which hold nearly 8 and 53 per cent in the metal index too gained 2 and 1.9 per cent, respectively. Almost all stocks barring NTPC and Tata Power closed in green.

After hitting an all-time high at 14,660 on January 23, Nifty Energy index tumbled nearly 9 per cent straight. Thereafter, it formed an Inverse Head & Shoulders pattern after a double bottom at 13,142-13,143 levels during March 23 and 26. The index gave a breakout of the pattern at 13,754 on April 24 and hit 14,140 levels. The index recently gave a bounce back after a pullback of 4 consecutive sessions up to the neckline level. The bounce back was supported with reasonable volumes and RSI positive crossover at 56 suggesting momentum. We may see the index giving some more upside in the near term.