Tuesday, March 29, 2011

Update for 29th March 2011

   Nifty Futures Poised at the 200 DMA !

  • Nifty futures opened flat on Monday morning and moved upwards with the help of it's positive momentum  retained form the previous week.
  • As pointed out in the previous post, Nifty future has already reached the 200 DMA at the 5700 levels. As indicated in the previous post, some more profit booking may come in to the market at these levels. 
  • Moreover, the market has already made strong gains continuously for the past five trading sessions. It is not very common for the major stock indices to make straight gains for more than five to six trading days.
  • These two factors may now lead to some kind of a consolidation or a mild correction happening in the market. 
  • However, the market remains in a 'buy on decline mode' as of now due to the presence of the recent positive momentum. 
   Nifty Futures - Intra-day Chart

Nifty Futures  - Daily Chart 

  • In case of some mild corrections happening in the market as part of the consolidation envisaged as above, Nifty futures can expect support at the 5600, 5550 and 5500 levels. The upper resistances are at 5700, 5760 and 5850. 
  • Please read the previous post for a medium term analysis of the technical position of the Nifty index.  
  Nifty Options Scene  

The March series Nifty Options Put Call ratio ( PCR March series ) moved upwards to finish at 1.87 times on Monday. ( In the Indian context lower PCR is generally associated with market falls and this is just the opposite of what many option textbooks suggest. ) The India VIX index gained by 2.69 % and closed at 21.02 on the back of the strong recovery lead volatility in the market. The improvement in the PCR and India VIX are pointing towards a positive scenario for the markets.  Huge covering of Call options were seen at the strike of 5500.  Huge Put writing was seen at 5700 strike. The 5700, 5800 and 5900 strikes are having the highest level of March Nifty Call OI as on Monday.   The corresponding strikes for Put OI are 5400, 5300, 5500 and 5600. Barring any unexpected developments, market is expected trade between 5500 and 5800 levels and the expiry is expected to be near the 5800 strike. ( However, readers may please understand that the technical situation of the market may change significantly from any informed guesses like these. )

 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 21.59, 3.61 and  1.10 respectively as on  28th 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 have closed with the maximum +100 values for the third day in succession as on Monday.

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  29th 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.

Click on the table above for an enlarged view.

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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