Update for 6th January 2011

       The New Year Party's Over ?

 

Banks played spoil sport for the second day in succession on the back of the increasing awareness in the market about the need for further increases in the interest rates in the economy. We had indicated in the previous post that any more damage to the charts of the banking sector sector stocks would seriously affect the present uptrend itself in the new year. It seems that the time  to decide the fate of the present uptrend  has arrived by now. Any further decline in the Nifty futures might force the Momentum Signal system to indicate an exit of long positions.

Nifty futures opened slightly lower on Wednesday at 6151 and this open became the high of the day later on. Almost immediately on the open, Nifty futures went to trade below the previous day's low and never tested the open. The contract traded in a tight range between 6120 and 6140 for most of the morning session. It broke below the 6120 mark and tested the previously indicated reference level of 6090 in the afternoon. It recovered to 6120 from the support at 6090, but closed lower at 6098 for the day.

Nifty Futures - Intra-day Chart    

Update for 5th January 2011

    Banks Spoil The New Year Party !!!

On the second trading day of the new year, Nifty futures opened slightly higher on Tuesday, when almost all international stock indices were trading with gains. We had indicated in the last post that the unusually low volumes seen on Monday, might be raising some questions about the  strength  of the present uptrend. It was also indicated in one of the previous posts that the rising interest rates may affect the banking sector and the Indian economy as whole. It seems that, these two factors were seen in action in Tuesday's trade, as Nifty futures started to correct right from the beginning of trade. Nifty futures recorded the day's low of 6147 by the 11.30 AM mark. A recovery in tandem with the gains in the FTSE index ( which did not trade on Monday when all other markets gained ) saw the futures reaching a new swing high of 6210. However, the contract was again sold off on the back of the all round weakness in the banking sector. Nifty futures closed at 6159 for the day.

Nifty Futures - Intra-day Chart