Tuesday, May 18, 2010

Update on The Ultimate Momentum Signal - 19th May, 2010

 A Day of Directionless Trading,  But What is Next ... !

Even though the last post had reported that the US markets were trading with losses of 1.25 %, the markets recovered  and closed without any losses overnight. Therefore, the Nifty futures opened with neutral international cues and traded lower to reach a low of 5017 in the first hour. The futures recovered later  and achieved a high of 5108 by 1.30 PM. The day's high of 5108 may also be treated as a  ( failed ? ) test of the 100 DMA at 5120. The day's trading ended at 5065 on a flat note.   The technical position of the market has not changed by the day's trading. The major question now is: Is the market becoming a range bound one ? Readers of this blog are requested to take note that the Momentum Signal System's signals may lead to whipsaws in a range bound market.
Nifty Futures - Daily & DMAs Chart 

For more analysis please take a look at the previous post too.  However, it is felt that a specific comment need to be made about the present day Indian Market. The Indian Market,  normally a high beta one, is holding up remarkably well on the face of  the high volatility seen in the international markets. The Indian markets used to have higher volatility than the western markets in the past.

World Markets

Due to the late recovery of the US markets on Monday, the European markets gained on Tuesday. The FTSE, DAX and the CAC closed with gains of 0.85, 1.5 and 2.1 % respectively on Tuesday.  The FTSE also closed just above it's 200 DMA. However, the US market indices were trading with losses of 0.5 to 1.0 % at 11.30 PM IST on back of reports of a proposed ban of naked short selling to be imposed by the German authorities on Wednesday. The VIX index was hovering at 30.5 without much change.

The Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  18th May 2010, is given below.

The Momentum Signal has returned -100 values for the second day in succession.

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 19th 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.

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

A close below the 5120 - 5130 levels is still bearish for the Nifty Futures. However, the triggers for an uptrend as per the Momentum Signal system have fallen and are placed at 5151 - 5155 levels.
Followers of this blog are requested to please read the Risk Factors  3 and 4, which may be applicable  to the present market conditions. Or please take note that the Momentum Signal System's signals may lead to whipsaws in a range bound market.

Please do write in your suggestions and comments about this blog.

Cheers and Prosperous Investing and Trading!!!



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