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

 The System Signals a Buy .. !

Finally, as expected by the previous three posts, the Momentum Signal system has indicated a buy after a small correction. The Nifty futures never traded below the last closing price of 4940 on Wednesday indicating strength. This strength was seen even after the overnight losses in the US markets and it's effect  on the European markets when they opened. The trading was confined to a narrow range for most of the day  and the futures rallied in the final hour of  trading. It closed at 5014, near the day's high. The Nifty future is expected to test the resistances one by one now. However, everything related to trading still depends on the international cues which are as unpredictable as ever. 

Nifty Futures - Daily Chart     

As shown in the chart above , the next resistances are the 100 and 50 DMAs at 5102 and 5173 respectively. If the futures is able to cross these resistances, a target of 5250 to 5300 may be feasible. Readers of this blog may  note that the prediction of targets is hazardous task because anything can happen at any time changing the whole scheme of things. Hence, the Momentum Signal system tries only to follow the markets on a day to basis and never tries to predict the targets. 

World Markets

Even though the European markets traded lower in the initial parts of their trading day, they recovered most of their losses when US markets opened with positive bias. The FTSE, CAC and the DAX closed with very minor losses on Wednesday. The US markets were trading with gains of a percent at the time of this post on the back of data showing better than expected sales of pending homes and autos.

The Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  2nd June 2010, is given below.

 The Momentum Signal has returned a value of +100 indicating the maximum positive momentum.

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 June, 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.

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

 

The closing values required as on the closing of trade on Thursday for the continuation of the positive momentum are below the current last traded prices.  

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.

 

© 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 - 2nd June, 2010

   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

The projected levels of closing values corresponding to the momentum shift / neutrality / continuation as on the close of trading on 2nd June, 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.

  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.

 

© 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.