Friday, May 27, 2011

Update for 27th May 2011

   Nifty Futures In the Green !

Nifty future has bounced back from the previously indicated support zone of 5350 - 5400, though the lower end of the zone was  slightly broken on last Wednesday. Although it was indicated in the previous post that some of the stocks would be coming under negative pressure from the derivative expiry and therefore, the expiry would be near the strike of 5300, it was not be. This guess was made due to new selling seen in in the money (ITM) 5300 call options on last Wednesday. However, massive covering of ITM 5300 calls were seen during the trading of Thursday, right from the beginning, invalidating the previous guess.

Now the important question is whether the present bounce is a change of trend or not. At present it is difficult to predict, except for accepting the facts of the reasonable support of the 5350 - 5400 base and also the support of the lower boundary of the old trading channel. Moreover, trailing valuations are also at around the one and a half year lows. Therefore a rally to the middle of the  trading channel can not be ruled out at present. Anyway lets see what the Momentum Signal indicates in the next few days !

Nifty Futures - Intra-day Chart    

    Nifty Futures  - Daily Chart  

  Nifty Options Scene   

The June series Nifty Options Put Call ratio ( PCR May series ) hovering at a very normal 1.34 times on Thursday. The PCR  as such is not showing any negative bias to the market as of now.

 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 19.95, 3.40 and  1.25 respectively as on  26th May 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 has remained in the negative momentum territory  with a value of  -80 as 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 27th May, 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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