Another Day of Range Bound Trading ... !!!
As expected, the Nifty futures opened in the positive territory on Tuesday and started the waiting game for the policy action by the RBI. The market spent most of the waiting period by trading around the last day's closing area. Then came the mild hikes in the interest rates which were already discounted by the market. Barring a mild excursion in to negative territory, the market rallied almost to the previous day's high, once the uncertainty of the RBI action was done away with. However, the markets could not sustain the rally and therefore, it returned to the middle of the new trading range and closed at 5433.
Nifty Future - Daily Chart
The daily chart of the Nifty futures has recorded yet another doji candle which may indicate a reversal or range bound trading. For a change, the BSE Sensex returned a solid white candle of comparatively small trading range for the day. Tuesday's trading has not changed the technical position of the markets. The Futures and the major indices are still trading above their short term support levels. However, the Momentum Signal indicates that all of them have closed in the neutral territory as on Tuesday.
World Markets
Following the momentum of the strong gains in the past week, the European stock market indices closed in the positive territory on Tuesday. The FTSE, CAC and DAX gained 0.27, 0.83 and 0.21 percents respectively even though closing prices were off their intra-day highs. After three days of more than 100 point gains, the US DJIA too opened in the positive territory alongwith the other Wall Street indices. However, at 11.00 PM IST, the US stock indices were trading flat to the negative territory. Meanwhile, the US Conference Board Consumer Confidence index for the month of July has fallen to the lowest since last February, amid worries about the lack of jobs.
Updated Momentum Signal Spreadsheet
The updated spreadsheet showing the Momentum Signal as on the close of 27th July 2010, is given below.
The Momentum Signal returned a +30 value indicating neutral conditions for the day.
Projected Momentum Signal Close Values
Please click on the table to enlarge. For more info on the above table, please click here.
The trailing stop for all long positions remains at 5360 which is 2.1 % away from the new high. A close below 5381 on Wednesday will lead to the Momentum Signal indicating a sell with -100 value. However, this signal will be technically confirmed only when the market falls below the 5350 levels and trades there for some time with good volumes.
As the Momentum Signal is primarily a trend following system, it may indicate whipsaw signals in range bound markets. As such, all readers of this blog are requested to read the various pages describing the system and understand all the intricacies of trading the Momentum Signal and it's risk factors too. Please do write in your comments and suggestions.
Cheers and Prosperous Investing and Trading !!!
To access and/or download the free online Position Limit Calculator click here.
To checkout the five year history of The Momentum Signal Spreadsheet click here.
To access and/or download the free online Position Limit Calculator click here.
To checkout the five year history of The Momentum Signal Spreadsheet click here.
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