Thursday, May 27, 2010

Update on The Ultimate Momentum Signal - 28th May, 2010

  Is It a Relief Rally or the Real  One .. ?

Some Pointers :
  • China expresses that it will remain as a long term investor in Europe, leading to a rally in all securities.
  • Equities, sovereign bonds and commodities gain.
  • The Euro currency too stages a bounce from the four year lows.
  • More European countries plan or authorise more budget cuts.
  • Optimism prevails in all the markets, at least for the day.

Stocks rallied all over the world on Thursday.  The European indices, the FTSE, CAC and the DAX gained 3.1, 3.4 and 3.1 % respectively. The US market indices were trading with gains of 2 to 2.9 % at the time of this post at 11.30 PM IST. The US VIX index has also fallen and was trading at 30.33.

Nifty Futures 

The Nifty futures took it's cues from the international markets and rallied strongly on the derivative settlement day on Thursday. However the June month futures were quoting at a discount of 19 points on the basis of the last traded prices. Meanwhile, the May month Nifty Futures closed at 5004, just above the 200 DMA at 4995. It is felt that some more steam is left in the rally. The momentum Signal system has indicated the end of the down trend. The closing levels required for the continuation of the down trend have decreased and are below the last traded prices.   

    Nifty Futures - Daily  Chart 

The Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  27th May 2010, is given below.

The Momentum Signal has indicated neutral value as on the close of trading on Thursday. 

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 28th 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.

The closing values required for the resumption of the down trend have decreased significantly and  are reasonably away from the last traded prices. The neutral area has also shrunk significantly thereby increasing the probability of indicating a buy signal as on the closing as on 28th May, 2010.

Cheers and Prosperous Investing and Trading !!!

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