Tuesday, May 25, 2010

Update on The Ultimate Momentum Signal - 26th May, 2010

   The Risk Perception Heightens ... !

Some Pointers

  • Tension increases in the Korean peninsula, which may harm the only growth story in the world, the Asian story.
  • IMF asks Spain to overhaul it's financial institutions.
  • Spanish bank regulators urges the weak banks to merge with the strong ones.
  • Three month USD Libor ( London Interbank Overnight Rate ) rate reaches the highest in eight months, indicating the Banks' reluctance to lend to other Banks.
  • CDS (Credit Default Swap) rates hits a new recent high.
  • The fear of the contagion is at a new high.
 Nifty Futures
Nifty Futures opened lower with a gap and never recovered on Tuesday. It traded mostly sideways till the European markets opened at 12.30 PM and thereafter sold off to record a low of 4786. However, it recovered some of the losses and finally closed at 4816.


As pointed out in some of the earlier posts, the next support zone for the Nifty futures is at the 4675 to 4700 area which corresponds to the lows of February,  2010.


The Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  25th May 2010, is given below.

The Momentum Signal has returned a value of  -100 for the seventh consecutive 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 26th 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.


All short positions in the Nifty futures may be protected with trailing stops which may be calculated by adding 2.1 to 2.5 % with the new low. 


Due to the computer system failure and some personal exigencies, the daily updates will be  very short  for the time being. I hope to provide the updates of the Momentum Signal System uninterrupted.


Cheers and Prosperous Investing and Trading !!!
 
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