Friday, March 11, 2011

Update for 11th March 2011

     Another Narrow Range Low Volume Day, But What Next ?

  • Nifty futures opened lower on Thursday and directionless trading was seen for the entire session. Volumes also remained comparatively lower.
  • There were just two outcomes after the completion of the session. First, Nifty futures closed with some losses for the day. Second, another subtle gap has been left in the charts as the previous day's last traded price ( 5532 ) and the official close price ( 5542 ) were not reached by the contracts on Thursday.  
  • Sometimes, these subtle gaps may indicate further weakness in the markets. ( However, the effects of these gaps are lesser when such gaps occur in a trading range. ) 
  • Since the market's technical position has not changed much during the day, no further commentaries are added in this post.
  • However, the losses being suffered by the US markets on Thursday may have it's negative effects, especially at the open on Friday.
  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 1.34 times on  Thusday. The India VIX index gained by  1.04 % following the losses and closed at 23.53.  The 5600 strike has kept it's position as the strike with the highest level of March Nifty Call OI by  Thursday.  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 21.04, 3.48 and  1.13 respectively as on  10th 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 Signals in respect of the Nifty futures, Nifty index and Sensex  have closed in the neutral territory  as on the close on Thursday.

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  11th 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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