Sunday, July 17, 2011

Update for 18th July 2011

    Nifty Futures In No-Man's Land ? 

It seems that Nifty futures is stuck in the no-mans land at present. Though the trading was highly volatile, Nifty futures closed without much change for the last four trading days. Moreover, in spite of the Momentum Signal going in to the negative territory, Nifty futures has remained steadfastly above the support of 5500  - 5550 area. 

Nifty Futures - Daily Chart   
Nifty Futures - Daily Moving Averages Chart

Nifty future is trading around the 100 day moving average ( DMA ) at present. The 100 DMA is at 5578 now. The lower support is provided by the 50 DMA at 5510. Similarly, the resistance is at the 200 DMA at 5745. The following weekly chart of the S&P CNX Nifty index shows that the index is trading at the midway between the eight month old higher resistance line and  an almost eighteen month old lower support of the old trading channel. The open interest positions of the Nifty options for the current series also point towards sideways trading till the expiry. ( Read further for more information ). Therefore, the immediate next direction of the Nifty contracts has become highly unpredictable as of now.

S&P CNX Nifty Index - Weekly Chart

The resistance for the week is still at the 5700 - 5760 area. In case of an unlikely break of the 5500 - 5550 support area, the lower support is at 5300 - 5350 area.

Nifty Options Scene   

The July series Nifty Options Put Call ratio ( PCR July series ) closed slightly lower at a 1.12 times as on Friday. The strikes with with the highest level of open interests of Nifty July Call and Put options are 5700 and 5500 respectively. These open interest might act as resistance and  support for the time being. These boundaries are mostly in alignment  with our earlier technical supports too. The Nifty July series Option Pain chart also shows this picture. However, all these factors are subject to any unexpected sudden changes which may happen at any time during the week before the expiry.
Nifty July Series Option Pain Chart

 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 20.45, 3.46 and 1.27 respectively as on 15th July 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  remained in the sell area with a value of  -100 as on 15th July, 2011. 

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 next close, ie. as on 18th July, 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 About, 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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