Update on The Ultimate Momentum Signal - 16th Nov. 2010

The Rebound is On !!!

In the last post, it was mentioned that the fall has already traveled a long distance and as such, traders may look out for a rebound from the lower supports. Even though the lower supports mentioned were at the 5940 to 6000 levels, it seems that, Nifty future has already started the rebound from the higher support levels  between the 6050 - 6090 levels. Now let's see how this reversal could have been identified in the intraday time frame.  

The chart below is a snapshot of the intraday chart of the Nifty future and the underlying index available to the public from the NSE, India website. The chart shows the trading of the morning session till 12.00 Noon. The dark brown line indicates the Nifty futures and the orange line represents the Nifty index. As the chart shows, Nifty futures opened flat and sold off almost

Nifty Futures - Intraday Line Chart

Original Picture Source : NSE India 

Update on The Ultimate Momentum Signal - 15th Nov. 2010

Is This an Intermediate Term Correction ?

The out of the blue sell off encountered by the Indian stock market in the last two trading days of the past week has already taken out all the gains which came in the Diwali week. It seems that a lower than expected IIP number and some poor quarterly results have added fuel to the fire. Now the important question before the traders and the investors is that whether this sudden sell off is a precursor to an intermediate term correction. 

Last Friday, Nifty futures opened slightly below the previous trading day's range and  a morning's intraday  low of 6185 was established. This low was just above the 6175 support as shown in the daily charts of the Nifty futures. The recovery from this low went above the initial highs of the day and reached 6241 before noon. However, the recovery to the previous day's last traded price seems to have been used by the market participants as a selling opportunity. The market slowly went in to a slide from this high on the back of  the losses in the international markets. The lesser than expected  IIP data seemed to be adding to the woes of the market. As the trading progressed, the selling accelerated with high volumes and Nifty future recorded it's low of 6074 in  the last minutes of Friday. The last trade was at 6084.

  Nifty Futures - Daily Chart