The Old Europe Strikes Again .. !
After the short covering rally last week, this blog had been expecting a small correction for the past two days. (A quote from the last post : "The futures also made gains for the past four trading days and therefore, it may pause or make a small correction. Traders may watch out for such a correction for making long entries if need be, on the basis of international cues." It was also stated that a test of the resistances after a small correction was the best case scenario for the bulls ). The cues for the expected small correction was provided by the European markets on Tuesday and the correction even became a 100 point sell off. However, the Nifty Futures closed above it's 50 WMA at 4918.
Nifty Futures - Daily Chart
As the futures have made a correction after the fast and furious short covering, it may rally further in case the international markets stabilises or stops providing the frequent negative cues. The first resistance above the Tuesday's closing is the 200 DMA at 5002. And the next resistances are the falling trend line of the regression channel and the 100 DMA at 5107. ( Please see the chart above ).
World Markets
The European markets opened flat and sold off on Tuesday. The Euro also hit a new low. However, when the US markets opened lower and started rallying on the back of higher manufacturing data, Europe too recovered the losses. The FTSE and CAC closed with minor losses of 0.48 and 0.13 percents whereas the DAX gained 0.28 %. The US market indices were trading with gains of half to three fourth percentages at the time of this post. ( 11.30 PM IST ).
The Updated Momentum Signal Spreadsheet
The updated spreadsheet showing the Momentum Signal as on the close of 1st June 2010, is given below.
The Momentum Signal closed with neutral values of +30 on Tuesday.
Projected Momentum Signal Close Values
Please click on the table to enlarge. For more info on the above table, please click here.
The closing values required for the resumption of the uptrend have fallen and are below the closing values of Tuesday. There is high probability of a trade being signaled as on the closing of Wednesday's trade. The values required for the resumption of negative momentum are also near the trading range of Tuesday. As the market risk levels are still above the normal, curtailing the trade sizes would be advisable. It may also be noted that very fast markets are not very suitable for the Momentum Signal trading system and therefore whipsaws are also possible.
Cheers and Prosperous Investing and Trading !!!
To access the free online Position Limit Calculator click here.
To checkout the five year history of The Momentum Signal Spreadsheet click here.
To checkout the five year history of The Momentum Signal Spreadsheet click here.
Disclaimer: No research, information or content contained herein or in the accompanied spreadsheet shall be construed as advice and is offered for information purposes only. We shall not be responsible and disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered by the user or any third party as a result of or which may be attributable, directly or indirectly, to the use of or reliance on any information or service provided. All files/information is provided 'as is' with no warranty or guarantee as to its reliability or accuracy.
No comments:
Post a Comment