Monday, March 15, 2010

Update on The Ultimate Mometum Signal

  The Breakout - Day 11

  Loss of momentum continuing ...?
Today, the Asian markets traded with a downward bias, fearing further monetary tightening  in China. The Nifty futures opened lower at 5122 and traded to a low of 5105, in the first  two hours. Later, the markets rallied and closed almost at the high of 5136. However, concerted selling in the futures were seen at the 5136 to 5136.25 range, whenever the futures reached those levels. But the sellers were not seen trying to damage the price by selling downwards. Please see the intraday chart of the futures given below.
Nifty Futures - 5 Min. Chart

All long positions in the Nifty futures entered as per the buy signal on 26th Feb. need to be protected 
with a stop loss at the previous week low of 5090. All short Put options also may also be covered as they have achieved the targeted 90 % price erosion. Any long call options may also be exited. The Nifty Future daily chart showing the stop loss is given below.
Nifty Futures - Daily Chart

The fate of the uptrend seems to be depending on the participation of the market heavy weight Reliance. Till today, Reliance seems to be unable to break out of the convergence of the 200, 100 and the 50 day moving averages at the 1030 - 1040 range. See the chart of Reliance showing the convergence of the various moving averages.
Reliance - Daily Chart with Moving Averages  

The Updated Momentum Signal Spreadsheet 

The updated spreadsheet showing the Momentum Signal as on the close of   15th March 2010, is given below.
You can click on the table to enlarge. For more info on the above table,  please click here.

The Momentum Signal has returned the maximum value of +100 for the eleventh consecutive day.

 Projected Momentum Signal Close Values

The projected levels of closing values required for momentum shift / neutrality / continuation as on the close  of trading  on 16th March 2010 are given in the table below. The table also include the projected closing values of BSE Sensex required for momentum shift / neutrality / continuation.

  You can click on the table to enlarge. For more info on the above table,  please click here.

Please note that the closing values required for a neutral momentum have significantly narrowed  and the closing values required for a -50 sell signal has moved  upwards  to 5082, which is just below the stop loss recommended earlier.

Cheers and Prosperous Investing and Trading!!!

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