Friday, June 24, 2011

Update for 24th June 2011

 A Recovery is On After the Inside Day Candles !

Contrary to the expectations of a resumption of the downtrend or even a test of the panic low, it seems that Nifty futures contract has started a recovery. Though this author personally didn't believe that the contract would make the recovery, he was forced to comment in the previous post that the formation of two inside day candles in a row might be indicating even a reversal and therefore, the immediate next direction of  the contracts had become highly uncertain. That is why the inside day trading setup was described in the previous post. Now, the recovery is on. As far as the Momentum Signal system is concerned, the last sell signal lead to a maximum favorable excursion ( MFE ) of  319 points in the Nifty futures.  Even if the maximum recommended trailing stop of 2.5 % from the low after the trade was followed, the trade might have lead to profit of  188 points.

  Nifty Futures - Daily Chart    

Nifty Options Scene   

The June series Nifty Options Put Call ratio ( PCR June series ) improved to 1.01 times on Thursday on the back of heavy selling of 5300 and 5200 strike put options.

 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 19.61, 3.30 and  1.33 respectively as on 23rd June 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  negative values of -100 and -80 respectively 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  24th June, 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 !!!

To access and/or download  the free online Position Limit Calculator click here. ( Please use the latest or updated browsers to access the Google Documents service. )

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