Tuesday, September 21, 2010

Update on The Ultimate Momentum Signal - 21st Sept. 2010

  Another Super Duper Monday ... !!!

The Nifty futures closed at the day's highs on last Friday indicating the buying pressure. And some follow up buying was also expected on Monday. As expected, the Futures opened higher and almost immediately set out for a test of the 5960 target already pointed out on this blog in the posts dated 16th and 20th September. Normally, some profit booking can be expected at such widely known targets. The Nifty futures corrected only 20 points from the said target of 5960 and again tried to test the highs. In this process of  the second test of the 5960 area, the correction from the target was limited only to just the half the points of the first.  As already explained on this blog that the third test of any support or resistance has more of a chance to effect a breakout, the third test of the target of the 5960 area resulted in an intraday breakout. And once again the bears were trapped.  It is better to remain  long instead of trying to find targets as strong bull markets have no resistances. The next minor resistances are at 6050 and 6200 before the resistance offered by the all time high at 6330.    

 Nifty Futures - Daily Chart     

 
The ferocious nature of the almost vertical rally indicates that the Nifty future is poised to test the all time highs once again. However, as the markets may not directly reach the said target and some shake out of the new bulls may happen, traders may not act on this opinion under any circumstances by making fresh long positions in the market just on the basis of this opinion. Let's see what the market does on a day to day basis and come to the conclusions on the basis of the latest happenings. 

Meanwhile the historical price earning ( PE Ratio ), price to book value ( PB Ratio ) and dividend yield ( DY Ratio ) of the Nifty Index reached 25.25, 3.93 and 1.01 as on 20th Septeber 2010. The following is a snapshot of the Nifty historical fundamental as seen from the NSE, India website.

Nifty Index - PE, PB and DY Ratios
 


Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as at the close of the trading on  20th  September, 2010 is given below :


Nifty futures and the tracked indices have closed with the maximum upward Momentum Signal values of +100 for the tenth  consecutive trading day.

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   21st September, 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 above table also indicates the extra ordinary strength of the bull rally because, even after a passage of ten days after the buy signal, the exit signal are still placed far lower than the current market levels. 
However, The trading stop for long positions under the Ultimate Momentum Signal system  stands raised to    5879 ( i.e. 6006 minus 2.1 % of 6006 ). Traders may raise the trading stop to 97.9 % of the new high, as and when the market makes such new highs.
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1 comment:

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