Update on The Ultimate Momentum Signal - 30th June, 2010

  The System Signals a Sell ... !

Even though it was expected that the Nifty Futures may test the resistance band, it was not to be ! The test of the resistance band had already happened on Monday itself ! In  the last post it was stated that "all major market indices barring the Indian and the German DAX are trading below their respective 200 day moving averages at present and therefore, the market may fail in the test of previous highs."  On Tuesday the Nifty Futures opened lower at 5322.80 and traded steadily lower  to reach a low of 5240.10 and finally closed  at 5268.50. The futures were supported by the regression channel on Tuesday's trading. However, The Momentum Signal system has already indicated a sell as on Tuesday's trading and therefore, it may break the support on Wednesday's trading. Once the  support line is broken it may also act as the next resistance line.

Nifty Futures - Daily Chart

 

The Stop Loss for the sell signal remains at the previous high of 5388. The next support for the futures are at the 5100 to 5150 range where many daily and weekly moving averages are situated at present. However, a new low in the western markets of US and UK may induce further weakness or even the much expected medium term correction. ( Please see the US S&P 500 chart below ). Even though the Indian markets are one of the strongest in the world, if and when panic sets in, all markets are sold off and the correlation between them even rises to the maximum.

 

World Markets

In Europe the FTSE, CAC and DAX closed with heavy losses of 3.10, 4.01 and 3.33 percents respectvely. The FTSE closed at an eight month low on Tuesday. 

US S&P 500 Index - Daily Chart at 11.00 PM IST

The widely followed US S&P 500 index was trading at six month lows of 1040 at  around 11.00 PM IST as seen in the above chart. The fear Index VIX was trading at 34 levels increasing around 15 % for the day.

Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  29th June 2010, is given below.

The Momentum Signal  has indicated a sell as on close of the trade on Tuesday. It may also be noted that system had indicated an exit of all long positions as on the close trade on Monday. ( Please see the previous post for details ).

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 30th 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.

 

A close below 5223 may indicate maximum negative momentum for the Nifty futures as on the close of Wednesday's trading. For the corresponding levels of the indices, please  refer to the table above. 

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.

 

© 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 - 29th June, 2010

  A Test of the Resistance Band Ahead ...?

In the last update, it was stated that the daily chart of Nifty Future has not yet lost the positive momentum as per the indication of the Momentum Signal system. In spite of the last week's all round weakness in the western markets and the occurrence of a bearish shooting star doji  candle in the Nifty index weekly chart, the futures opened positively on Monday and rallied to close at 5338.50. The market seems to be in the process of re-testing of the resistance band as envisaged in the last Friday's update. If the world markets do not give any negative shocks overnight, the Nifty futures may retest the previous highs. Meanwhile, the Momentum Signal has closed in the neutral territory requiring an exit of the long position with an approximate profit of 130 points. ( Please see the details in the Momentum Signal Table ).

Nifty Futures - Daily Chart

Even though the Momentum Signal has indicated neutrality, the futures may go either way as no clear direction of the market is available at present. It is customary for a market to spend some time just below the major resistances before deciding the way forward. If the world markets do not negatively affect the Indian markets, the markets can even trade to new highs. However, if the markets fall below the stop loss level of 5265 it may attract heavy selling.

World Markets

The European markets closed with gains after sustaining losses on most days last week. The FTSE, CAC and the DAX closed with gains of 0.50, 1.61 and 1.43 percents respectively. The US markets were trading absolutely flat at time of this post  at 11.30 PM IST. 

Meanwhile at the G-20 meet, the leaders declared the intention of advanced economies to cut their deficits by half by 2013. This will limit their bond issues and consequently the US bonds hit new highs. The spending cuts may lead to the weakening of the present recovery which was achieved  on the back of government and central bank support. Paul Krugman, a noted economist, has commented  that the planned spending cuts by the advanced economies may pave the way for the third depression.  ( To read the story, Click here ).    In case any readers are interested in what happened in the great depression of the 1930, at least from the technical analysis pint of view, click here to read an earlier post published in this blog titled " What If The History Repeats Itself? ".

Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  28th June 2010, is given below.

The Entry and the Exit levels of the last trade in accordance with the Momentum Signal Trading system are marked in the above table. As has already been stated, the system has indicated an exit of long positions as of Monday.  

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 29th 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.

Any higher closing at the end of Tuesday's trading may indicate a gain of positive momentum for the futures. However, a  signal supported by a close at a new high may induce higher confidence in the move.  All major market indices barring the Indian and the German DAX are trading below their respective 200 day moving averages at present . Therefore, market may fail in the test of previous highs too. 

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.

© 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.