Tuesday, May 11, 2010

Update on The Ultimate Momentum Signal - 12th May, 2010

  Show Me The Money ... !

The shock and awe is over !
The international investors were asking  the following question when markets opened for trading after  Monday's stupendous gains: ' Show me the money ! '

Even though the Trillion Dollar European bailout plan has somewhat averted the possibility of a free fall of Euro and European assets, some analysts are saying that the trend will continue. Investors are raising doubts about the efficacy of the plan. The plan entails even more borrowing too. The structural changes required by the debt ridden nations will still be very hard on the people. The hardships will last for comparatively very long periods too. The Euro currency has already lost  most of it's gains it made after the announcement of the plan and Gold is still trading strong.

The European markets recovered some of their losses on Tuesday on the strength of the US markets, which though opened in the negative, rallied to the positive territory. At 11.30 PM IST, the US markets were trading with positive gains of 0.5 to 1.25 %.  

Nifty Futures

Nifty futures opened with negative bias at 5191 and traded lower to reach a low  of 5122. Tuesday's low was very near to the 100 DMA at 5120, which was pointed out as the support in the last post. The futures closed at 5130. Tuesday's trade was confined between the 100 DMA and the 50 DMA at 5210. The direction of the next trade remains uncertain at present. However, if the futures gets supported around the 100 DMA, the market may try to recover some of the losses on Wednesday. The next minor resistance is  at the 5162 level, which is the low of May, 2010.

Nifty Futures - Daily Chart  

The Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  11th May 2010, is given below.
Momentum Signal has returned a value of -80 for the day.

Projected Momentum Signal Close Values

The projected levels of closing values corresponding to the momentum shift / neutrality / continuation as on the close of trading on 12th May, 2010 are given in the table below. The table also include the projected closing values of BSE Sensex corresponding to the momentum shift / neutrality / continuation signals.

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

The closing values required for the resumption of an uptrend have decreased significantly and are just above the 50 DMA.
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Cheers and Prosperous Investing and Trading!!!   
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Venkat said...

Your blog is very effective.

momentumsignal said...

Thank you Venkat.

Kind Regards,