Wednesday, August 18, 2010

Update on The Ultimate Momentum Signal - 19th Aug. 2010

  Another Test of the Highs ... !!!

Even though this blog was anticipating a test of the highs in the morning session,  it was not to be. ( Please see the previous post for details. )  The Nifty futures opened and remained range bound as usual till about about 2.00 PM on Wednesday.  Till that time the futures were confined to a very small trading range. However, the absence of any downtrend seems to have lead to a bout of panic short covering. Once the Tuesday's highs were broken, the futures never looked back and closed almost at the highest point of the day at 5492.  The close was at a new thirty month high too.
  Nifty Futures - Daily Chart 
As this blog has written many times in the past, the 5500 to 5550 area may offer resistance to the markets. 
Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as at the close of the trading on  18th August, 2010 is given below :  
 
 
The Nifty future and the underlying index have closed in the buy territory as per the Momentum Signal system. ( Please also read the last parts of these post describing the limitations of the system in dealing with ranged markets. )
 
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  19h 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.  
 
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 !!!

To access and/or download  the free online Position Limit Calculator click here.

To checkout the five year history of The Momentum Signal Spreadsheet click here
 
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