Thursday, March 10, 2011

Update for 10th March 2011

   A Flat Close and Nifty Futures Seeking Direction ?

  • First a disclosure. This author didn't attend most part of  the trading session on Wednesday. Therefore, this update is kept very short avoiding long market commentaries. However, all the data, charts and system updates are included. 
  • Nifty futures as well as the major stocks seem to be seeking direction for moving either way at present. Therefore, market seems to be going through a phase of sideways ranged trading. Here is a quote from the previous post, which might remain very relevant as of now : 'Readers are once again requested to take note that even the best analysis and the trading system outputs are susceptible to become wrong, whenever the market goes in to a trading range. This is because of the fact that trading ranges are formed as a result of haphazard trading with sudden reversals, but mainly confined to a broad range.'
  Nifty Futures - Intra-day Chart

  Nifty Futures  - Daily Chart 

 Nifty Options Scene   

The March series Nifty Options Put Call ratio ( PCR )  decreased to close at 1.35 times on  Wednesday. The India VIX index  fell by  1.64 % following the sideways trading  and closed at 23.28.  Some strangles involving the strikes of 5000 ( Put ) and 5800 ( Call ) were transacted on Wednesday. Call open interest increased at the 5600 strike indicating some call writing. Following the call writing at 5600, the 5600 strike has acquired the position of the strike with the highest level of March Nifty Call OI by Wednesday.  The corresponding strike for Put OI is 5400. The second strike with very high Put OI is 5300. This data may be indicating the possibility of an immediate trading range between 5300 and 5700.

 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 21.18, 3.50 and  1.12 respectively as on  9th March, 2011.  ( More information and a long term analysis on Nifty historical valuation are available from the "Nifty Fundas" page ). 

 Latest Ultimate Momentum Signal 

The Momentum Signal in respect of the Nifty futures and Nifty index have fallen to the neutral terriory  as on the close on Wednesday. The Momentum Signal value of Sensex has retained a +100 value. 

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  10th March, 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.
All readers are once again requested to note that the Momentum Signal trading system is susceptible to whipsaw trades in  ranged markets as is being observed now. 

Readers are also requested to go through The Signal, Entries and Exits, Position Limits, Risk Factors, Risk Analysis,  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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