Monday, March 7, 2011

Update for 7th March 2011

  The Expected Test of  200 DMA at 5660 Fails ?

  • It was said in the last post that Nifty futures were seemingly poised for a test of the 200 DMA at 5660. Accordingly, Nifty Futures opened  higher and tried to breakout above the 5598 swing high on last Friday. However, it seemed that the breakout attempt was a bit premature and this might have lead to it's failure.
  • The breakout failed almost immediately as indicated by the fall back of the futures below the breakout level of 5698 in the morning session itself. Another important change seen in the market on Friday was the loss of premium by the Nifty futures. This might be indicating a failed test for the time being, unless the contract gains again in the next two or three trading days and breaks out above the 5600 levels.
  • Due to the increasing uncertainties on many fronts, ( politics, rising oil etc ) market may trade lower or in the best case scenario, remain trading sideways for some time before deciding the direction of the breakout. ( Also see the weekly chart below showing possibility of a sideways market ).
This update is also kept short, but with the usual data and charts, due to some exigencies and the regular readers are requested to kindly bear with the inconvenience.

    Nifty Futures - Intra-day Chart

  Nifty Futures  - Daily Chart 

S&P Nifty Index - Weekly Chart

 Nifty Options Scene   

The March series Nifty Options Put Call ratio ( PCR )  closed at 1.33 times on  Friday. The India VIX index  closed flat at 22.96, losing 0.22 %. Call open interest increased at the 5600 strike significantly.indicating  call writing after the indication of the breakout failure. Some additions to Put OI were seen at the strikes of 5500 and 5600.
 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 21.21, 3.51 and  1.12 respectively as on  4th 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 Nifty futures and the two major indices, Nifty and Sensex, have weakened to the +50 levels by the close of trade 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  7th 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.

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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