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Monday, December 20, 2010

Update for 21st December 2010


    Nifty Future is Still in the Sideways Mode !  

After the long weekend, when the indian markets were opening for the new week, Asian markets were trading with losses on the back of tensions in the Korean peninsula.  The SGX Nifty future was also quoting below the previous close. Accordingly, Nifty futures too opened lower near the lower reference point at 5900. Trading remained between the  5900 and 5940 reference points in the first two hours of the trading day. But the recovery rally after the gap opening continued even though the Nifty contracts encountered some minor selling at the 5965 and 5990 levels. The day's high was at 6000. But the afternoon session saw a mild correction when Nifty futures traded lower to reach 5950. The close was at 5953. 

   Nifty Futures - Intra-day Chart    



Nifty Futures - Daily Chart


The daily chart of Nifty futures too shows the flat trading  range between 5860 and 6000 in which the contract has confined itself for the past five trading days. As the technical position of the market has not changed at all, all the previously  indicated reference points too remain valid for the next trading day. These reference levels are 5860, 5900, 5940, 6000, 6030 and 6090. ( Please see the previous post for a detailed analysis. ) Even though Nifty future closed below the falling trend line, BSE Sensex closed above the similar trend line on Monday, may be on the back of strength seen in the market heavy weight Reliance.

Nifty Option Scene

Mirroring the flat trading seen in the markets, there were no significant changes in the Nifty option positions too. The Nifty options Put Call Ratio ( PCR ) for the month of December remained more or less unchanged at 1.29 on Monday. Some additions to the Calls open interest ( OI ) were seen at the 5900 and 6000 strikes. Similarly, some additions to the OI of Puts were also seen at the 5900 and 5800  strikes.  However, the India VIX or the fear index closed with a gain of 2.67 % at 20.78 %.


Nifty Trailing Fundamentals


The trailing fundamental valuation of Nifty index too remained unchanged on Monday. The trailing Price Earnings Ratio  ( PE Ratio ), Price to Book Value ( PB Ratio ) and Dividend Yield ( DY Ratio ) of the Nifty Index  were at 23.73,  3.75 and  1.05 as on   20th December 2010. ( More information and a long term analysis on Nifty historical valuation are available from the "Nifty Fundas" page ).  



Latest Ultimate Momentum Signal

The updated Momentum Signal spreadsheet showing the latest signal values of the current month Nifty future and the Nifty index is given below :
 
 
Momentum Signal has closed with a value of +50 for the second day. Readers may please take note that the Momentum Signal system has a tendency to indicate whipsaw trades in range bound markets as already pointed out in various previous posts and Risk Factors.  
 
Projected Momentum Signal Close Values

The projected levels of Momentum Signal values applicable to various ranges of closing values of the current month Nifty Futures, Nifty Index and the BSE Sensex,  as at the close of next trading day, ie. as on  21st December, 2010, are given in the following table. All readers are requested to take note that the table below is just a ready reckoner for the next day's Momentum Signal values and the figures are not intended to be interpreted as any targets for the Nifty futures or indices shown therein.
 
 
Please click on the table to enlarge. For more info on the above table,  please click here.

Readers are requested to go through the Risk Factors, Risk Analysis, Position Limits and FAQs pages of this blog to gain a reasonable understanding of the trading system. Please do post your 
comments and suggestions on how new  posts can be made more useful.
 
Cheers and Prosperous Investing and Trading !!!

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