Update on The Ultimate Momentum Signal – 1st Nov. 2010
When the trading ended on last Thursday, the derivative expiry day, November series Nifty futures were quoting at 6076 with a life time high premium of 88 points over the previous month’s futures. Therefore, the market was generally expected to open higher on last Friday. It was quite difficult for the chartists to align the current month futures and the previous months futures on charts because of the excessive premium. The excessive premium of Nifty futures were seen declining to more reasonable 30 to 40 points during the day. The Nifty futures opened at 6050 on Friday and selling pressure was seen almost right away. Even though the future contract recorded a low below the crucial 6000 level in the morning session, it recovered immediately and started trading between mostly the 6000 and 6042 levels. A sell off after the 1.00 PM mark saw the futures recording a low 5966.25. However, another recovery which started at 2.45 mark saw the Nifty futures recording the day’s high at 6066. As is common these day’s, it seems that the stops of the bulls below the 6000 mark and bears above 6050 were taken out during Friday’s trading. The last trade was at 6040. Even though the gains on a short position were not held, the sell signal indicated by the Momentum Signal as on the close of Thursday’s trading would have resulted a favourable excursion of 110 points during Friday’s trading.