Wednesday, April 14, 2010

Update on The Ultimate Momentum Signal - 15th April, 2010

   Where do we go from here... !

Since the Indian markets closed for the holiday on Tuesday, no major equity markets have traded  lower or closed lower. The world markets are still trading in the low volatility  grinding rally mode.  Hence the Nifty futures may also try to follow the world markets by trading upwards to test the previous high. SEBI - IRDA spat has gone in to a temporary truce by the new order by the SEBI which bans only the introduction of new ULIPs by the insurance companies. The insurance companies are free to market the existing ULIPs schemes and also collect the renewal premium on existing policies. Now the insurance companies or it's regulator can go to a competent court for a decision.

Nifty Futures - Daily Chart  

Although the futures closed below the upward moving support line on the last trading day it can still move in to the channel or reverse from the support line.  Major selling can be expected only below 5290 levels.

The Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  13th April 2010, is given below.

The Momentum Signal has indicated a sell as on the closing of trade on Tuesday.

Projected Momentum Signal Close Values

The projected levels of closing values corresponding to momentum shift / neutrality / continuation as on the close of trading on 15th April, 2010 are given in the table below. The table also include the projected closing values of BSE Sensex corresponding to momentum shift / neutrality / continuation.

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

The triggers for the end of the downtrend have moved upward but the values are very near to the last traded prices. The chances of the present sell signal becoming a whipsaw is high.  Readers of this blog may please note that any momentum indicator may generate  many whipsaws in the markets wherein the long slow moving rallies may take place. Accordingly, the Ultimate Momentum Signal is also susceptible to whipsaws if the present condition continues.The said fact is already listed in the Risk Factors page of this blog and the same is reproduced here :
Risk Factor 4 :  It is also seen that even if the momentum signals a downward shift by signaling -50 value, in some cases, especially in strong long term bull markets, the momentum shifts again to the opposite within a very short time. In strong bear markets, the opposite may also happen.

Cheers and Prosperous Investing and Trading !!! 

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