Tuesday, February 16, 2010

Update on The Ultimate Momentum Signal

The market rallied today and closed almost at the high. The Momentum Signal has indicated a buy. The Signal has been giving neutral values for the last two days and these neutral values meant either a pause in the downward momentum or a momentum shift.  The latest chart of the S&P CNX Nifty is given below:

 S&P CNX Nifty

It seems that the index has not yet  broken the the bear flag pattern. However,  the present pattern can also be interpreted as a round bottom formation. You can see an example of a round top formation  in the chart. The problem with chart patterns is that an analyst will only see the patterns he wishes see on a chart.

As posted earlier the futures may encounter resistances at 4950, 5003 and 5015 being the previous minor high, 20 week moving average and 100 day moving average respectively.

The Updated Momentum Signal Spreadsheet 

Here is the updated spreadsheet showing the Momentum Signal as on the close of 16th, Feb. 2010.

 Projected Momentum Signal Close Values

The projected levels of closing values required for momentum shift / neutrality / continuation as on the close  of trading as on 17th, Feb. 2010 are given in the table below. 

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