Update on The Ultimate Momentum Signal - 4th May, 2010

 The Sell Signal is Still Hanging In There, But ... ! 

The Nifty futures opened at 5235 on Monday's trade with a gap of 25 points from the last traded price and thereafter traded sideways almost till noon. It traded to a high of 5245 just after noon and then it  traded lower when the European  markets opened with some losses at 12.30 PM IST. The futures traded lower to test the previous minor low of 5198 it reached on 28th April, 2010. However, it reversed from a low of 5202 and finally closed at 5225.70 with a loss of 35 points. As the present sell signal is four trading days old and the future has not been able to  break the  previous minor low,  the possibility of some short covering may be expected in the next trading days.

Nifty Futures - Daily Chart  

Except the possibilities of a covering rally, the technical position of the market has not changed much during the past three trading days. The resistances at the 5290 to 5310 range remain the same.

World Markets

The Asian markets closed with losses on Monday. Even though a Greek bailout package  was announced on late Sunday, the package requires to be ratified by legislative action by the major EU countries. It is reported that Greece may suffer more during  the 'violent restructuring' envisaged by the IMF.  Global investors seems to be bit skeptic about the bailout. This skepticism is indicated by the near 1 % weakening of the  Euro against the USD on Monday even after the announcement of the USD 140 billion bailout plan. The European stock markets closed with minor gains on Monday on the strenght of the US markets. The US stock markets were trading strongly upwards on release of  data indicating higher consumer spending  and higher manufacturing.

The Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  3rd May 2010, is given below.

The Momentum Signal has closed in the sell territory for the fourth day without much favorable excursion by the short instrument raising the risk of the short position.

Projected Momentum Signal Close Values

The projected levels of closing values corresponding to the momentum shift / neutrality / continuation as on the close of trading on 4th May, 2010 are given in the table below. The table also include the projected closing values of BSE Sensex corresponding to the momentum shift / neutrality / continuation signals.

 You can click on the table to enlarge. For more info on the above table,  please click here.

The closing values for the continuation of the downtrend have decreased  by around ten points for the futures and are at the Friday's low at 5251 levels.The possibility of the short positions exiting by a higher close in the neutral territory has increased very much. Even though the system rules prescribes  the  trailing stop at 2.1 % away from the low for a short position, the stop loss point for the short positions in the futures is brought down to the Friday's  low of 5252. This is done as a very special case.

Please do write in your suggestions and comments about this blog.

Cheers and Prosperous Investing and Trading!!!    

You can use the free online Position Limit Calculator from here.

You can also checkout the five year history of The Momentum Signal Spreadsheet from here.

© 2010 momentumsignal.blogspot.com All rights reserved.

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.

Update on The Ultimate Momentum Signal - 3rd May, 2010

 The Sell Signal is Still Hanging In ... ! 

Last Friday, the Nifty futures opened with some positive bias as expected and traded just below the first resistance of 5278 for around 30 minutes. However, it cleared this resistance in the first attempt itself and traded above the resistance for a significant time period. However, the futures failed to bridge the last Wednesday's gap of 20 points fully, as it could not trade towards the top end of the gap at 5298. ( See previous posts ). As the futures failed to test the gap, it traded lower at the fag end of the trading and closed within the sell territory of the Momentum Signal system. Even though the underlying index closed in the neutral territory, the BSE Sensex closed in the sell area. It is again clarified that the closing values corresponding to the BSE Sensex momentum is being published  only for the purpose of confirmation of the signal emanating from the Nifty Futures either with the underlying index or with the BSE Sensex. 

Nifty Futures - Daily Chart   

     

The technical position of the market has not changed during the past two trading days. The resistances at the 5298 to 5310 range remain the same.  

World Markets

Even though some of the Asian markets closed with gains on last Friday, all major western markets closed with losses. The US markets have recorded their first weekly loss in the ninth week after continuously gaining for eight weeks.  Because of the increasing fears of a sovereign debt crisis, the CBOE VIX index gained 19.6 % last Friday and closed at 22.05 %. The S&P 500 index was trading just above it's support at the 1080 to 1083 range. It is reported that an agreement to bailout Greece by the EU - IMF combine may be announced by late Sunday in Europe. This may give further cues to the market on Monday.

The Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  30th April 2010, is given below.

Projected Momentum Signal Close Values

The projected levels of closing values corresponding to the momentum shift / neutrality / continuation as on the close of trading on 3rd May, 2010 are given in the table below. The table also include the projected closing values of BSE Sensex corresponding to the momentum shift / neutrality / continuation signals.

 

 You can 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 decreased and the closing values for the continuation of the downtrend have remained almost static.  However, the closing values for a -100 momentum signal have decreased significantly.

The stop loss point for the short positions in the futures is brought down to the Friday's high of 5290 and is to be strictly followed.

Please do write in your suggestions and comments about this blog.
 
Cheers and Prosperous Investing and Trading!!!  
 

You can use the free online Position Limit Calculator from here.

You can also checkout the five year history of The Momentum Signal Spreadsheet from here.

© 2010 momentumsignal.blogspot.com All rights reserved.

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.