Wednesday, August 17, 2011

Update for 17th August 2011

Blue Chips Hold, But Mid & Small Caps Slide Continues !

As is expected after a deep fall, the international stock indices bounced back, and now, it seems that the process of testing the resistances are over. The next leg, naturally is a test of the panic lows. Since the Indian stock markets were already in a long drawn down trend, the losses were of lesser magnitude over here. And hence the smaller bounce. The bounce failed at the previous low cum resistance at the 5175 - 5225 level and thereafter, the Nifty index is in the process of finding value by testing the lower support. The 4950 - 5000 area being the panic low extends short term support for the time being. If the support holds, Nifty may again test the resistance area. Barring any major triggers, Nifty index may spend some time trading between the 5000 - 5175 area before the next leg of any directional movement. Meanwhile, some of lesser quality stocks may continue to slide.  

Nifty Futures Daily Chart 

 Nifty Trailing Fundamentals  

Though, the major indices closed at a fourteen month low as on yesterday, the trailing valuation ratios of the Nifty index are just reaching the long term averages right now, as the trailing ratios were   hovering at significantly higher levels of recently indicating over valuation.
The trailing Price Earnings Ratio  ( PE Ratio ), Price to Book Value ( PB Ratio ) and Dividend Yield ( DY Ratio ) of the Nifty Index  were at 18.11, 3.11 and 1.36 respectively as on 16th August 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 as on 16th August, 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 17th August, 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 AboutThe 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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