Sunday, January 2, 2011

Update for 3rd January 2011



  Will the Uptrend Continue in to the New Year ?

In the last day of trading in the just gone by year, Nifty futures closed at a new swing high. As expected, Nifty futures tested the 6175 - 6180 resistance and closed just below these levels. As for the title question, 'Will the uptrend continue in to the new year ?'  - the answer is as uncertain as ever. And nobody ever knows for sure what exactly the market may do in any time frame but for some generalisations. What we, the traders, can do at best, is to follow the market day by day and come to the best conclusions, which may or may not become correct by hindsight.  That is why we are forced to follow a system of trading and go by the evidence thereof. This is exactly where the Ultimate Momentum Signal trading system helps the traders. The system assumes that the uptrend continues until the system signals an exit or reversal. 

Please note that the next update will be published a bit late but hopefully before the  end of  trading on Tuesday, the 4th of January, 2011.
 

Nifty Futures - Intra-day Chart   

  


Nifty futures opened at the previous close of the January series at 6131 and almost immediately went on to rally to the next indicated resistance at the 6175- 6180 area. However the close was slightly lower at 6164.



Nifty Futures  - Daily Chart 



The next higher resistance is at the 6250 level at present. The lower supports are available at the 6090, 6030 and 6000 levels. Therefore, the important reference levels available for intra-day analysis and trading are 6000, 6030, 6090, 6130, 6175, 6250 and 6330.  

Nifty Options Scene
The January series Nifty options Put Call ratio ended  at a reasonably normal level of 1.61 as on  31st December 2010. Massive additions to the Put option open interest ( OI ) to the tune of 22.26 million  were seen at the 5900 strike. The highest addition (  12.66 million ) to the Call option OI was seen at the 6300 strike. The highest open interest ( OI ) of Put options is at the 6000 strike. And the highest number of Nifty Call option OI is at the 6300 strike. The 6200 strike also held a similar number of Call option OI, indicating a market range between  6000 and 6300 in the immediate future. The India VIX also fell to 16.06, indicating the mild positive outlook.
Nifty Trailing Fundamentals    
 


The trailing Price Earnings Ratio  ( PE Ratio ), Price to Book Value ( PB Ratio ) and Dividend Yield ( DY Ratio ) of the Nifty Index  were at 24.48,  3.87 and  1.02  respectively as on  31st 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 :



Nifty futures and both the indices, viz. S&P Nifty and BSE Sensex have closed with Momentum Signal values of +100 as on the last day of the year 2010.


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  3rd January, 2011, 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 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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To checkout the five year history of The Momentum Signal Spreadsheet click here

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1 comment:

Fiscal Doctor said...

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