Sunday, June 27, 2010

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

    Make or Break Week Ahead ... !

Last week, the Nifty futures opened at 5325 with a positive gap and achieved a high of 5377.55. However, the futures reversed from the resistance band of 5360 - 5400 and closed even lower than the open at 5286.  The weekly chart of the S&P Nifty index shows a shooting star doji candle indicating further weakness. The European markets were in clearly in a short term downtrend as the indices have lost continuously for the last four trading days. The weekly charts of US market indices  have also shown bearish engulfing candles in the last week.

S&P Nifty  Index - Weekly Chart

As is seen in the above weekly chart, Nifty index has been trading in an ascending channel for almost ten months now. In case of a small correction the index may be supported by the confluence of weekly moving averages at around the 4150 levels.

Nifty Futures -  Daily Chart 

The stop loss for the existing long positions remains at 5265 ( i.e. High 5377.50 - 2.1 % of High ). As per the  Momentum Signal model, the futures has not yet lost it's positive momentum. However, Monday's trading may decide the fate of the present uptrend.  

Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  25th June 2010, is given below.
The Momentum Signal has closed in the marginally positive territory  last Friday.

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 June, 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 a sell signal have increased and are even higher than the last Friday's close. However, if the markets recover and close higher than the last Friday's high, the positive momentum may continue.The probability of the system indicating a sell signal have gone up considerably. World markets have shown more weakness than the Indian markets in the past week. Traders may checkout the world markets for a reaction  to the ongoing G 20 meet and take cues for the market direction. 

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