Friday, July 1, 2011

Update for 1st July 2011

  Nifty Future Touches the 5700 level !

The Nifty futures contract touched the lower end of the expected 5700 - 5750 target this morning. Please read the previous posts for more information on this expected target. Now, as already pointed out in the previous post, the front line stocks may take a breather while the second rung stocks may continue to rally. 

Nifty futures - Daily Chart

The most important question now is whether the present uptrend may turn in to an intermediate or medium term trend and move above both the falling trend line seen in the daily and weekly charts and the 200 DMA at 5760. The major indexes have been falling since last November and in an intermediate or medium  term correction. The present recovery has been supported by heavy buying by the FIIs after a long time. Also the market has a tendency to turn around some six months before the interest rate cycle ends and growth cycle starts. However, these questions will remain unanswered  till the market itself reveals it's intentions. Technically speaking, a breakout above the falling trend line as well as the 200 DMA can act as the proof of the market's turn around in the medium term. Even if the scenario of an intermediate term uptrend becoming  real, Nifty may spend some time around the 5700 - 5750 levels before the actual start of the next leg of such a rally. Some minor correction can also occur before the onset of the next leg of a possible uptrend. In case the  present uptrend peters out at the said levels, it can lead to a revisit of the lower boundary of the old trading channel. In the present scenario, the 200 DMA at 5750 - 5760  and the 50 and 100 DMAs at the 5550 levels may act as the resistance and supports in the short term.  

Nifty Options Scene   

The July series Nifty Options Put Call ratio ( PCR July series ) closed at a normal 1.25 times on Thursday. 
 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 20.82, 3.50 and  1.2 respectively as on 30th 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 positive momentum territory ( but area )  with  value of 100 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 1st 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 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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