Update on The Ultimate Momentum Signal - 30th Aug. 2010

 Nifty at the 50 DMA Support ... !!!

The Nifty futures opened flat on last Friday and as usual it tried to test the previous day's highs. However, it failed again to break 5490 resistance, which was mentioned in the last two posts. If the market fails to trade above a resistance level, it normally changes the direction and test the supports. The support at the 5450 - 5460 failed in the test and therefore, the market attracted sudden selling as pointed out in the  previous posts. The market has a tendency to retest the support it just broke. Nifty futures have also closed just above it's support from the 50 day moving average  ( DMA ) last Friday. The Nifty index and it's derivative have been trading above this support level for the past two and a half months. Therefore, futures may retest the 5450 - 5460 resistance on Monday. If it is able to trade above this level, it may again try to test the 5490 resistance.  

As the US markets have recovered last Friday on the back of Fed Chairman's positive statements, the chance of the Nifty futures retesting the resistances have risen.    

Nifty Futures - Daily Chart  

The lower panel of the above chart shows the various daily moving averages ( DMAs ) of   the Nifty futures.  The 20, 50,100 and 200 DMAs of the futures are placed at 5462, 5395, 5265 and 5173 respectively as on 25th August 2010. The futures may get supports at these various DMAs and other previous lows in case of  a mild correction.

Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as at the close of the trading on   27th August, 2010 is given below : 

As per the Momentum Signal system, Nifty future and the major indices, Nifty and Sensex, have closed in the sell territory with signal values of -100.

Projected Momentum Signal Close Values

The projected levels Momentum Signal values applicable to various ranges of closing values of the Nifty Futures, Nifty Index and the BSE Sensex,  as at the close of next trading day, ie. as on   30th August, 2010, are given in the following table.

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

As matter of abundant caution, it is reiterated that the market may still be range bound by all effects and therefore, the risks of the system indicating whipsaw signals are extremely high if the markets remain range bound.

"Readers of this blog may please note the following  'Risk Factor' which is being  repeated almost daily these days. The markets may be trading in small ranges at the top end of a slow climb and for all practical purposes the trading may remain range bound. Range bound markets are not suitable for the  profitable trading of the Momentum Signal system."

 

"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

© 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 - 27th Aug. 2010

    An Inside Day Candle ... !!!

The Nifty futures opened in the positive territory on the derivative settlement day and stayed there for the first half of the trading session. Unable to make much progress beyond the previous resistance level of 5490, the futures corrected to the previous day's lows by 3 PM. However, the indices, both Nifty and Sensex never broke thorough the previous day's lows on the settlement day. On the back of some rearguard buying action in some of the major Nifty stocks during the last half an hour of trading on the settlement day, the futures recovered and settled at 5478.  The Nifty index and the futures are still hovering above their 20 DMAs which also coincides with the support at 5450. The minor resistances are at the 5490 - 5505 levels.

Nifty Futures - Daily Chart  

Any fall below the 5450 level may attract selling and a break above the 5505 level may lead to re-test of the 5550 mark. 

Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as at the close of the trading on   26th August, 2010 is given below : 

As per the Momentum Signal system, Nifty future and the major indices, Nifty and Sensex, have closed in the sell territory with signal values of -50.  However, as explained already, the sell signal is yet to be confirmed by the market action of the futures breaking the support at 5450. 

Projected Momentum Signal Close Values

The projected levels Momentum Signal values applicable to various ranges of closing values of the Nifty Futures, Nifty Index and the BSE Sensex,  as at the close of next trading day, ie. as on  27th August, 2010, are given in the following table.

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

As matter of abundant caution, it is reiterated that the market may still be range bound by all effects and therefore, the risks of the system indicating whipsaw signals are extremely high if the markets remain range bound.

"Readers of this blog may please note the following  'Risk Factor' which is being  repeated almost daily these days. The markets may be trading in small ranges at the top end of a slow climb and for all practical purposes the trading may remain range bound. Range bound markets are not suitable for the  profitable trading of the Momentum Signal system."

 

"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

© 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.