Monday, July 5, 2010

Update on The Ultimate Momentum Signal - 6th July, 2010

 A Day of Lackluster ( Bandh ) Trading ... !!
The market opened without much ado on the bandh Monday  and traded with very low volumes. The high-low range was also very narrow. However, Monday's trading has proved that the rate hike by the RBI has already been discounted by the market and consequently, some of the interest sensitives even rallied mildly. Even though the Momentum Signal has been indicating negative momentum for the past three days, the market  has not broken down below the support of the 30th June's low of 5225. This low is also supported by the 20 DMA at 5205 levels. As the market action has not been supporting the sell signal,  the market may  also stage a recovery in the next trading sessions. It may also be noted that the Indian market has stood like  a rock at a time of all round losses in the Chinese and western markets in the immediate past. 

The US markets are closed on Monday on account of their independence day on 4th of July. The European markets are also trading lackluster in the absence cues from the US markets. 

Nifty Futures - Daily Chart   

The last three daily candles have been kind of  dojis and have traded inside the 30th June's up-candle, indicating indecision. Whichever the direction of the market, it may move out of the last three day's range in next trading sessions.  

Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  5th July 2010, is given below.

The Momentum Signal has indicated a value of -100 for the third day, even though the market has not yielded much ground to the bears.

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 6th July, 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.
The closing value ranges corresponding to the Momentum Signal values of -50 to -100 have moved down substantially and are  just above the trading range of Monday. An exit of the present  sell signal has become a high probability. 

All readers of this blog are requested to read and understand all the intricacies of trading the Momentum Signal System and it's risk factors. Please do write in your comments and suggestions.

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