At the ongoing Vibrant Gujarat Global summit, where it is represented by a high-profile 20-member business delegation, Saudi Arabia invited India to play a key role in the kingdom's economic transformation as it seeks to reduce its dependence on oil exports.
The daily bar chart pattern of Nifty vaulted above the twin resistances of the 8300 level and the down trend line, when it opened with an upward 'gap' to begin trading today.
The index continued its intra-day up move and closed at 8380 with strong volume support (not shown). A breach of a trend line with a 'gap' is considered to be 'stronger' than a breach during regular intra-day trading.
The index killed two birds with one stone - technically confirming the 'double bottom' reversal pattern and reversing the 4 months long down trend.
For the second day in a row, the index closed above its three EMAs in bull territory. The 50 day EMA is forming a small 'rounding bottom' pattern and looks ready to negate its earlier 'death cross' (below the 200 day EMA).
Daily technical indicators are looking bullish and showing upward momentum, hinting at a continuation of the rally. Is it time to throw caution to the winds and start buying by the truckload?
Not really. Nifty's TTM P/E has moved up to 22.42 - well above its long-term average. The breadth indicator NSE TRIN (not shown) is falling deeper inside its overbought zone. A correction/pullback may be around the corner.
The index gave two good opportunities to buy when it dropped twice to the 7900 level in Nov '16 and Dec '16. Don't fret if you didn't buy then. There are always good buying opportunities in individual stocks.
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