Sunday, August 8, 2010

Update on The Ultimate Momentum Signal - 9th Aug. 2010

 Nifty Futures Still  Hindered by the  Resistance ... !!!

Nifty future is still finding it very difficult to break the resistance at the 5475 area. For the second day in succession, Nifty futures failed the test of the highs and closed  near the lower end of the daily trading range. The futures seem to have lost the positive momentum in the last trading days. The Momentum Signal system has indicated that even though the last close of the Nifty future has been just above the neutral area, both the major indices, Nifty and Sensex  have closed in the neutral territory on last Friday. 

Nifty Futures - Daily Chart  

Nifty future is still bounded by the tight trading ranges. Most components of the underlying Nifty index  are also trading flat in ranges and are showing no momentum.

Nifty Futures - Weekly Chart 

Resistance from the top end of the year long trading range and a historical PE ratio of 23 makes the 5500 to 5550 range a tough nut to crack for the Nifty futures. This is the reason why the very active  ( highly speculative ? ) trading at present is mostly confined to the mid and small caps.  According to the historical records of the last eleven years, Nifty index has traded above the 23 PE mark only  during bubble periods and that too for very short periods.

Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as at the close of the trading on 6th August, 2010 is given below :
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  9th 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 :

"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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1 comment:

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