The Ultimate Momentum Signal

Monday, March 7, 2011

Update for 7th March 2011

The Expected Test of 200 DMA at 5660 Fails ?

It was said in the last post that Nifty futures were seemingly poised for a test of the 200 DMA at 5660. Accordingly, Nifty Futures opened higher and tried to breakout above the 5598 swing high on last Friday. However, it seemed that the breakout attempt was a bit premature and this might have lead to it's failure.
The breakout failed almost immediately as indicated by the fall back of the futures below the breakout level of 5698 in the morning session itself. Another important change seen in the market on Friday was the loss of premium by the Nifty futures. This might be indicating a failed test for the time being, unless the contract gains again in the next two or three trading days and breaks out above the 5600 levels.
Due to the increasing uncertainties on many fronts, ( politics, rising oil etc ) market may trade lower or in the best case scenario, remain trading sideways for some time before deciding the direction of the breakout. ( Also see the weekly chart below showing possibility of a sideways market ).

This update is also kept short, but with the usual data and charts, due to some exigencies and the regular readers are requested to kindly bear with the inconvenience.

Nifty Futures - Intra-day Chart

Nifty Futures - Daily Chart

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Friday, March 4, 2011

Update for 4th March 2011

Nifty Futures Poised for a Test of the 200 DMA at 5660 ?

Although, Nifty futures closed flat on a close to close basis on Thursday, the contract has retained all the positive momentum at the close.
Nifty futures tested the lower supports twice during the trading session on Thursday, once in the morning and the second, in the afternoon session. But both the tests ended above the lower reference level of 5450.
Therefore, Nifty futures seemed to be set for a test of the upper resistances.
The next higher resistance above the present swing high of 5598 is the 200 DMA placed at 5660.
The next higher resistance above the 200 DMA is around the 5800 levels, where the futures contract and the underlying index, Nifty, may meet the upper boundary of the long running trading channel.
Due to the lack of time, this update is kept short, but with all the usual charts and data.