QUANT SYSTEM TRADE RECOMMENDATION - 12.08.21
- Capt D. Ganesh Raja
- Aug 12, 2021
- 3 min read
From the desk of Capt.D.Ganesh Raja
Dear Friends,
When markets gave a breakout from a tight range, I followed the standard rule of thumb of “2 days 2%” if the markets stayed above the key resistance level for at least 2 days by more than 2%. In addition, I did wait for filters to align itself to the new data.
Some of the key data points which were raising red flag especially inflation figures have changed. Retail inflation at 5.59% is within the expectation of MPC (Monetary Policy Committee) and this coincides with record food grain production, when supposedly “Farmers” are protesting against farm laws. I wonder who is doing the farming.
One concern is the continuing fall in the 10-year Government security index and I had said before that this is a leading indicator, albeit with time lag. For now there are no signs of trend reversal hence the long side recommendation.
I had to front load few weekly filters to arrive at a conclusion and for now after waiting for a brief period the Quant system has given a buy signal as of today’s close of 16364.0. Some time ago I had recommended to go short but now the recommendation is to go long. Sometimes signals reverse immediately and sometimes after a delay. You might ask if I was wrong, but let me remind again that I have no compulsion to protect my ego by being right but rather follow the system and see if returns can be delivered, as simple as that. Market is always right, the sooner a trader realizes the better it is for him or her, which would help one to trade without bias.
I had also mentioned few weeks ago the ambiguity in the Elliot wave count and I was especially cautious when market was in a rangebound movement because of the divergences in the oscillators and that too at a key Fibonacci levels. If trades can be taken protecting capital and staying out at critical junctures, the returns would be decent.
Due to paucity of time, I am keeping this post brief and request readers to view the trade recommendation log carefully to plan and take the trades.
Gold: Pattern formation in progress so no recommendation to make.
Silver: No views for now.
Realty: No change in views since what I had posted last.
Note for reading this repot:
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 – 16364.0 . Recommended to long on Nifty at these levels with stop loss at 15834.0.
Target1 – 16639.0, Target 2 – 17152.0, Leverage 1.0x.
Minimum profit potential – 1.7%. Asset allocation profit potential – 1.7%. Target 2 is likely to be achieved.
Minor trend: Up , Intermediate trend – Up, Long term trend – Up.
EXISTING TRADE RECOMMENDATION OVERVIEW
SEE TRADE RECOMMENDATION LOG: ENTIRE ROW IS IN RED
NEW TRADE RECOMMENDATION
NIFTY (Also mentioned above), HDFC LTD., GAIL, HDFC LTD., RELIANCE INDUSTRIES
SEE TRADE RECOMMENDATION LOG: ENTIRE ROW IS IN GREEN FOR NEW TRADE RECOMMENDATIONS AS OF TODAY.
TOTAL LEVERAGE OF ABOVE NEW TRADE RECOMMENDATIONS: 1.5
COMBINED PROFIT POTENTIAL FOR ABOVE TRADES: 6.0%
TIME WINDOW OF TRADES: 7 DAYS TO 60 DAYS.
TOTAL LEVERAGE INCLUDING UNCLOSED POSITIONS AS PER PREVIOUS RECOMMENDATION: 2.05
RETURNS TILL DATE SINCE 04.07.20 : 42.52% (INCLUDING THE CORRECT RECOMMENDATION OF REALTY SECTOR BENCHMARKING WITH REALTY INDEX)
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