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Sunday, August 15, 2010

Update on The Ultimate Momentum Signal - 16th Aug. 2010

  The Indian Market Recovers, But Others ... ?

Last Friday, the Nifty futures opened near the previous day's close ( 5421 ) and rallied  till it reached a high of 5479. The high also coincided with the last traded price of 9th August, 2010. Readers of this blog  might remember that the Nifty futures failed to touch the said last traded price of 5478.50  on  10th August and this  fact was pointed out in the  post dated 11th August, 2010 as a symptom of weakness. Now  the  Nifty futures have filled the so called subtle gap. However, the top end of the gap still extends some resistance. Therefore, it corrected from there and finally closed at 5438. 

The market correction seems to have been averted by the strength of the banking sector lead by the SBI stock and the rally in the Tata Motors stock. Barring these stocks, many Nifty stocks are  still trading flat, raising the question which stocks would lead the next leg of the rally. Most of the international markets closed with losses last week. Any further sustained weakness in the international markets may affect the Indian markets.

Nifty Futures - Daily Chart



Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as at the close of the trading on  13th August, 2010 is given below :  
 
 
The Momentum Signal indicates that the market closes were in the neutral territory as on lat Friday.

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  16h 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.  
 
Any excursion by the Nifty futures below the last Friday's low  ( 5420 ) may attract further selling. Any close below the 5435 area is indicated as a weak close too.
However, as matter of abundant caution, it is reiterated that the market is still range bound by all effects and therefore, the risks of the system indicating whipsaw signals are extremely high. 
"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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To checkout the five year history of The Momentum Signal Spreadsheet click here
 
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3 comments:

vaib said...

hi

The candlesticks of wed and Thu are making piercing pattern. the candle of Fri gives a further confirmation of this reversal pattern. So we might see higher markets next week...
I am just a student of tech analysis...plz see if u can chk my analysis..

Regards
vaibhav

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momentumsignal said...

Hi,
We are all students of the market !
It seems that, especially in a ranged market, the piecing pattern may indicate only a test of the range highs.
Well, this is only an opinion and the market may or may not heed to my opinions.

Thanks
ms