Thursday, August 12, 2010

Update on The Ultimate Momentum Signal - 13th Aug. 2010

 A Flat Day, But What Lies Ahead ... ?

The Nifty futures opened lower with a gap at 5372 on Thursday in accordance with the international cues. It also recorded it's daily low of 5363.60 in the initial stages. After finding it's support at the 5350 - 5360 area, the futures tried to test the highs and reached the previous day's last traded price of 5405.  It suffered even a  minor correction from this intraday high. When European markets opened slightly lower and rallied to the positive territory in the middle of the day, the Nifty futures too rallied to record the day's high of 5432 . This high also coincides with the earlier minor support of the futures at 5425 - 5430 area. The futures traded between the 5400 and 5430 area for the rest of the day and closed at 5418. ( However, most of the gains in the underlying index was provided by the banking sector lead by SBI. )

As the first wave of selling seems to have been bought off, it remains to be seen what is the next direction of the futures. Any close above the highs of the last trading day seems to be capable of neutralizing the present sell signal.

Nifty Futures - Daily Chart


The Nifty future has supports  at 5350, 5225 and 5100 levels. A conclusive break of the first support is the requirement for the confirmation of  an intermediate downtrend.
World Markets

The European markets closed flat on Thursday. The US markets opened deeply in the negative territory on the back of an unexpected increase in the jobless claims and a subdued forecast by the tech giant Cisco. At the time of this post at 11.30 PM IST, the US markets were still trading with  losses even though the markets had recovered some of their earlier losses.

Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as at the close of the trading on  12th August, 2010 is given below :
 
 
The Momentum Signal indicates that both the futures and the underlying index closed in the sell area as on Thursday.
 
Projected Momentum Signal Close Values

The projected levels Momentum Signal values applicable to various ranges of closing values of the Nifty Futures, Nifty Index and the BSE Sensex,  as at the close of next trading day, ie. as on  13th August, 2010, are given in the following table.
 
 
Please click on the table to enlarge. For more info on the above table,  please click here.   

The following quotes are from the previous posts and are being repeated here as matter of abundant caution :

"Readers of this blog may please note the following  'Risk Factor' which is being  repeated almost daily these days. The markets are trading in small ranges at the top end of a slow climb and for all practical purposes the trading is range bound. Range bound markets are not suitable for the  profitable trading of the Momentum Signal system."
 
"As the Momentum Signal is primarily a trend following system, it may indicate whipsaw signals in range bound markets. As such, all readers of this blog are requested to read the various pages describing the system and understand all the intricacies of trading the Momentum Signal and it's risk factors too. Please do write in your comments and suggestions."

Cheers and Prosperous Investing and Trading !!!

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