Monday, March 14, 2011

Update for 14th March 2011

   Nifty Futures Still in Neutral Territory !

  • Although Nifty futures have made losses in the last two days of the week, the contract never breached the 5400 support area. 
  • Friday's trading has again lead to the formation of another doji candle indicating indecision by the market participants.
  • The contract is still trading in a technically neutral area from where it can move either way.
  • The market may even keep on trading in a trading range for some more time as envisaged in many previous posts, before trying to breakout either way. ( Please see the shaded area as being the previously indicated preferred trading area and pointed out in many previous posts.)
  • As far as the market and Nifty futures are trading in a trading range,  most analysis would go awry and would be of no use.
  • As such, this author is forced to make no further market commentaries in this post. However all the usual charts, data and trading system updates are appended.  
  Nifty Futures - Intra-day Chart

   Nifty Futures  - Daily Chart 

 S&P CNX Nifty Index - Weekly Chart

 Nifty Options Scene   

The March series Nifty Options Put Call ratio ( PCR )  decreased slightly to close at 1.33 times on  Friday. The India VIX index gained by  2.55 % following the losses and closed at 24.13.   The 5700, 5500 and 5600 strikes have kept their positions as the strikes with the highest level of March Nifty Call OI as on Friday.  The corresponding strikes for Put OI are 5400, 5300 and 5200.  This data may be indicating the possibility of an immediate trading range between 5300 and 5700. The implied volatility of Nifty options as indicated by the India VIX has been hovering in the 20 plus mark for some time  even as the  market is generally trading range bound. It seems that the improvement in India VIX and the neutral nature of the markets are leading to a situation where the option writers are taking it as a field day for writing straddles and strangles.

 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 20.85, 3.45 and  1.14 respectively as on  11th 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 Friday.

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  14th 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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