QUANT SYSTEM TRADE RECOMMEDATION 23.05.21

Dear Friends,

Last week I was able to demonstrate about following the trading system, in my case the Quant system developed over many years of research. I would again like to reiterate that news events, interest rate announcements, Government policy etc. are not part of the system. How much news can an individual track really or say even Institutions? Even if we do there might be contradictory indications based on that news. I am not saying that I ignore news totally but see what effects it has on custom indicators of the system. Patience, ability and humility to accept losses, endurance and brutal honesty in not hiding one’s own failures are the key to building successful trading systems. We cannot control the happenings around us but we can control our response to it. Enough of sermons , I think.

Nifty weekly chart is indicating upward movement in confirmation to system indications. Immediate weekly trend is up, so it would be better to continue holding long position. There has been a tremendous build-up of volumes, which is a confirmation of the up move.

The weekly chart of 10 year Government securities has broken the channel to the upside and this is generally a leading indicator to the market movement, hence this also is in confirmation of the likely continuing up move.

I am discussing Gold in details here since long term asset allocation is important for our savings. Gold has moved out comfortably out of the downtrend channel in the weekly charts, to start a new uptrend and where the second leg of movement is in formation. In the daily charts there is a bottoming out pattern of inverse Head & Shoulders, along with a Cup and handle pattern on the right side of the chart.

Viewing past data and trying to project for future price action is a part of many statistical models, also widely practiced in fundamental analysis. Weather the price action follows the model prediction is a totally different thing altogether.

When making a very long commitment to any asset class I generally use the monthly chart to get a picture in addition to applying certain proprietary indicators which I cannot disclose due to IP considerations.

Looking at Gold chart in USD, it can be seen that in 09.09.2011 it was trading at 1875.70 and over a 10-year period it has been languishing. This chart has completed 3 leg zig-zag correction. There is a possibility of slight downward movement but that does not change the long-time bullish scenario. I don’t have tools to apply my proprietary indicators on Gold chart in USD , so I have to rely on local prices.

MCX monthly Gold chart has shown two bar reversal, which is kind of a bullish sign. Now Gold is entering “Fib cluster” zone, which is Fibbonacci retracements / projections in a dense zone and can have some kind of listless consolidation effect.

Note for reading this report:

Note1: The stop losses are on end of day basis

Note2: When trade recommendation is given around a certain price, it means that the trade may be taken the next trading day or if a price zone is given for taking a trade then trade has to be taken on the day price reaches within that zone.

Note3: A separate excel sheet is attached to view the performance of the recommendations, which also reduces the task of individually reporting the performance of each trade recommendation. Viewing the excel sheet “TRADE RECOMMENDATION LOG” will be self-explanatory. Also in this sheet Trade recommendations which are still active are marked.

When signals are triggered mid-week, that is updated in log sheet and covered in the weekend report , due to paucity of time.

MARKET & NIFTY OVERVIEW

Nifty: LAST CLOSE – 15175.30. System gave long signal in on 07.05.21 at 14823.15. Continue holding long position. As of now there is an absolute profit of 2.38%.

Target1 – 15350.0, Target 2 – NA, Leverage 1.0x

Minimum profit potential – 3.5%. Asset allocation profit potential – 3.5%.

Minor trend: Neutral, Intermediate trend – Up, Long term trend – Up.

GOLD: LAST CLOSE – 48404.0. System gave long signal on 07.05.21 at 47751.0. with a stop loss at 46650.0. Presently at an absolute profit of 1.37%. Continue to hold long position in Gold.

Target1 – 49400.0, Target 2 – 50200.00, Leverage 0.3x

Minimum profit potential – 3.5%. Asset allocation profit potential – 1%.

Minor trend: Up, Intermediate trend – Up, Long term trend – Up.

SILVER: LAST CLOSE – 71049.0 System gave a buy signal in Silver on 05.05.21 at 67524.0 with stop loss at 67200.0 and presently at an absolute profit of 5.22%. Continue to hold long position in Silver.

Target1 – 76219.0, Target 2 – 79141.0, Leverage 0.2x

Minimum profit potential – 11.5%. Asset allocation profit potential – 2.3%.

Minor trend: Up, Intermediate trend – Neutral with upward bias, Long term trend – Up.

EXISTING TRADE RECOMMENDATION OVERVIEW

1. BAJAJ AUTO: LAST CLOSE – 4125.55. System gave a buy signal on 07.05.21 at 3856.75 with stop loss at 3794.0 and presently at an absolute profit of 6.97%. Continue to hold long position with profit protection stop at 4000.00

Minimum profit potential – 9.7%. Asset allocation profit potential – 1.5%.

Minor trend: Up, Intermediate trend – Up , Long term trend – Up.

2. BHARTI AIRTEL : System gave a buy signal on 07.05.21 at 566.50 with stop loss at 542.0 and stop loss triggered on 18.05.21 at 536.33 resulting in absolute loss of 5.66%. Trade recommendation closed.

4. BPCL: LAST CLOSE – 461.05. System gave a buy signal on 07.05.21 at 443.15 with stop loss at 424.15 and presently at an absolute profit of 4.04%. Continue to hold long position.

Target1 – 480.0, Target 2 – NA, Leverage 0.15x.

Minimum profit potential – 8.3%. Asset allocation profit potential – 1.20%.

Minor trend: Up, Intermediate trend – Up, Long term trend – Up.

NEW TRADE RECOMMENDATION

1. DLF: LAST CLOSE – 288.40. Recommended to go long if price drops slightly to around 270.0 levels with stop loss at 250.0.

Target1 – 304.10, Target 2 – 346.35, Leverage 0.05x.

Minimum profit potential – 28.3%. Asset allocation profit potential – 1.5%.

Minor trend: Up, Intermediate trend – Neutral, Long term trend – Neutral.

2. HDFC LTD.: LAST CLOSE – 2518.85. Recommended to go at these levels with stop loss at 2440.10.

Target1 – 2595.0, Target 2 – NA, Leverage 0.15x.

Minimum profit potential – 3.0%. Asset allocation profit potential – 0.5%.

Minor trend: Neutral with upward tendencies, Intermediate trend – Neutral with upward tendencies, Long

term trend – Neutral.

3. LIC HSG. FIN,: LAST CLOSE – 456.05. Recommended to go at these levels with stop loss at 420.0. This is a positional trade with a slightly longer timeframe, hence be patient and let the trend development deliver returns, all going well. The indications are , it will easily surpass target 1.

Target1 – 500.10, Target 2 – 566.20, Leverage 0.10x.

Minimum profit potential – 9.6%. Asset allocation profit potential – 1.0%.

Minor trend: Up, Intermediate trend – Up, Long term trend – Up.

4. L&T: LAST CLOSE – 1418.05. Recommended to go at these levels with stop loss at 1318.20. I would advise that in spite of the risk of not taking profits when target is achieved, to hold position for a longer timeframe.

Target1 – 1521.10, Target 2 – 1605.0, Leverage 0.15x.

Minimum profit potential – 7.3%. Asset allocation profit potential – 1.10%.

Minor trend: Up, Intermediate trend – Up, Long term trend – Up.

5. TATA MOTORS: LAST CLOSE – 313.10. Recommended to go at these levels with stop loss at 285.0. It has cleared a very important resistance at 279.93 on a weekly basis and also satisfying the “Two days and two percent” rule, which gives a lot of confidence in the trade signal.

Target1 – 370.0, Target 2 – 424.0, Leverage 0.20x.

Minimum profit potential – 18.2%. Asset allocation profit potential – 3.6%.

Minor trend: Neutral, Intermediate trend – Neutral with upward tendencies, Long term trend – Up.

TOTAL LEVERAGE OF ABOVE NEW TRADE RECOMMENDATIONS: 0.85

COMBINED PROFIT POTENTIAL FOR ABOVE TRADES: 7.6%

TIME WINDOW OF TRADES: 7 DAYS TO 45 DAYS.

TOTAL LEVERAGE INCLUDING UNCLOSED POSITIONS AS PER PREVIOUS RECOMMENDATION: 2.45X

RETURNS TILL DATE SINCE 04.07.20 : 32.64%

TRADE RECOMMENDATION LOG.pdf

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