Update for 13th July 2011

 Nifty Futures Supported by the 50 DMA ?

Nifty futures reversed from the 200 DMA at 5750 level and traded lower to reach the 50 DMA at 5505. The 100 DMA is presently placed at 5575. Most of the trading yesterday was confined between these 50 and 100 DMAs. The presence of a wide gap between the trading ranges of the last two days also complicates the technical position. Such a gap may attract the market to fill it in the short term. Now, if the gap does not get filled in the next few days, the downtrend may continue with a minimum target of 5450. A break of  the 5500 level and 50 DMA may also lead to a revisit of the 5350 - 5400 support levels. However, all these are contingent upon the markets failing to cross the 100 DMA, filling the gap and closing above these important points.

Nifty Futures - Moving Averages Chart  

Nifty Futures - Daily Chart     

Update for 12th July 2011

The Reversal Leading to a Correction ?

As on yesterday's close, the Ultimate Momentum Signal closed in the neutral territory. The last buy signal was given by the system on 27th June, 2011 at a Nifty future level of 5537. This buy signal lead to maximum favorable excursion ( MFE ) or maximum profit opportunity of 223 Nifty points. 

Meanwhile, as envisaged in all the three previous posts, Nifty future has returned to the lower support area of 5500 to 5550 level as a consequence of it's failure to break above the 5750 - 5760 resistance. Now the important question is whether the correction would continue or not. Irrespective of the outcome, the Momentum Signal seems to be poised to give a sell signal as on today's close unless the market makes a strong recovery intraday. In case the correction continues after some trials to fill the gap between yesterday's and  today's trading ranges, the next support would be at the 5350 - 5400 levels where the lower boundary of the old trading channel is situated at present.

Nifty Futures - Daily Chart