Monday, August 8, 2011

Update for 8th August 2011

It's Chaos Out There !

  • Finally, major stock market indices have decisively broken out of their eighteen month old upward moving trading channel. Sadly, they have broken downwards. 
  • The just broken channel had a height of 650 points approximately.
  • Now the question is, will the market revisit the lower boundary of another support line to be drawn some 650 points below the just broken channel.
  • As stock markets all over the world have been shaken and started a significant down move simultaneously, such a possibility is not out of the realms as of now.
  • As such, next major medium term support for the Nifty is at around the 4700 to 4800 levels. However, readers may please take note that this is not a trade recommendation and is provided as a medium term plausible scenario. Even if the scenario works out  as expected, it might happen only after some time and that too, after some recoveries. It is also possible that, by that time, the support might move upwards merely because of  passage of time.  
  • In the meanwhile, the lower boundary of the just broken old trading channel and the forward slanting supply line will act as the resistances against any up moves.
  • Even after the continuous fall for the past eight months or so Nifty index is just reaching the long term trailing valuation averages by now. This author was regularly pointing out the fact that the index is retaining premium valuations, in spite of the low growth scenario. ( Please see the regular updates of trailing fundamentals of Nifty index and the long term analysis report thereof. )        

S&P CNX Nifty Index - Weekly Chart 

Nifty Futures Daily Chart       

Nifty Futures - Daily MA Chart

Nifty Options Scene   

The August series Nifty Options Put Call ratio ( PCR August series ) closed 0.87 times as on Friday. 

 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 18.76, 3.21 and 1.32 respectively as on 5th 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 sell territory as on 5th 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 8th 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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