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Sunday, April 24, 2011

Update for 25th April 2011



   Nifty Futures Test the 5925 - 5950 Resistance, But ?     

  • As expected,  Nifty futures tested the 5925 -5950 resistance area on the last trading day. Though Nifty futures traded in the positive territory on Thursday, trading was mostly sideways and in a range bound manner for the whole trading day.
  • Therefore, the result of the test was remained unknown even at the close of trading on Thursday.
  Nifty Futures - Intra-day Chart



Nifty Futures  - Daily Chart 




  • Thursday's range bound trading, just below the resistance area, has lead to the formation of a doji candle in the daily chart, implying some hesitation or indecision by the market participants.   
  • It's not yet clear whether Nifty futures will break out above the resistance or consolidate further in the present trading range for some more time.
  • A significant break out above the resistance area may lead to a rally of some 200 to 250 points or even a test of the all time highs in the medium term.
 S&P CNX Nifty Index - Weekly Chart


  • As envisaged in some of of the recent posts, Nifty index has already spent three weeks in the shaded area ( seen at the right end of the chart ) which is placed at the top end of the lower trading band. Therefore, a breakout either way from the present narrow trading range may happen in the next week or so.
   Nifty Options Scene   

The April series Nifty Options Put Call ratio ( PCR April series ) increased to 1.41 times on Thursday. Some Put writing at the higher strikes of 5900 and 6000 was seen on last Thursday indicating some positive bias to the market. However, the highest open interest of April call and put options  were at the strikes of 6000 and 5700 indicating the broad range of the market.


 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 22.18, 3.73 and  1.06 respectively as on  21st April, 2011.  ( More information and a long term analysis on Nifty historical valuation are available from the "Nifty Fundas" page ).


 Latest Ultimate Momentum Signal
 

Though the indices and the futures gained on Thursday, the Momentum Signal ended up in the negative momentum area. Readers may please note Momentum Signal is susceptible to whipsaws in markets which are trading in tight ranges.

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 25th April, 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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