QUANT SYSTEM TRADE RECOMMENDATION - 18.07.21

From the desk of Capt. D.Ganesh Raja

Dear Friends,

We have been discussing that Nifty has been stuck in a trading range for several weeks and the weekly closing was at the upper end of that range. The daily charts are indicating a double bottom pattern but there is no convincing confirmation that it will successfully breakout from the pattern. The weekly charts and filters are still showing a downward bias. The short recommendation in Nifty given on 09.07.21 triggered stop loss on 15.07.21 and has entered “No trade zone” for now. I have demonstrated over the course of one year that Quant system enters “No Trade Zone” once in a while to protect capital.

We have to wait for market action to resolve itself, based on which filters would adjust itself and give a direction in which to trade.

Having said that even if the system gives a long or short signal, it would be on a daily timeframe and I would not be recommending because as informed before they can only be traded using intraday systems, which would require to spend considerable amount of time for daily monitoring. For this reason I generally give positional trading recommendations when there is multiple confirmations.

Keeping larger picture in mind and re-visiting the factors I discussed in my previous week’s post I would be extremely skeptical at this juncture in putting a long side trade in Nifty.

Sector rotation is evident based on analysis of sectoral indices. The Quant system is very well capable of simultaneously having long and short signals,

From here onwards since I would get busy with some Marine related assignments, it might not be possible to update regularly and would request all to keep checking the blog on regular basis so that you can read it as and when I post it.

Gold: Reward to risk not in favour for trading in either direction. It is better to wait to wait at the side-lines.

Silver: No views for now.

Realty: I had mentioned that there have been indications this sector bottoming out and some kind of recovery seen as per charts. Some realty stocks have been rallying off late but I have no specific recommendations to make.

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: It was recommended to short Nifty 09.07.21 at 15689.80 with stop loss at 15885.75. Stop loss triggered on 15.07.21 resulting in an absolute loss of 1.49%. Trade recommendation closed.

EXISTING TRADE RECOMMENDATION OVERVIEW

1. INDIAN HOTELS: LAST CLOSE – 147.90. Recommended to go long at 147.45 on 27.06.21 with stop loss at 131.35 and presently an absolute profit of 3.66%. Continue to hold long position.

Target1 – 179.0, Target 2 – NA, Leverage 0.05x.

Minimum profit potential – 21.4%. Asset allocation profit potential – 1.1%.

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

2. ACTION CONSTRUCTION EQUIPMENT: LAST CLOSE – 231.45. Recommended to go long at 222.30 on 27.06.21 with stop loss at 198.25 and presently an absolute profit of 4.12%. Continue to hold long position.

Target1 – 300.0, Target 2 – NA, Leverage 0.10x.

Minimum profit potential – 35.0%. Asset allocation profit potential – 3.5%.

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

NEW TRADE RECOMMENDATION

As mentioned before Quant system is indicating sector rotation and, in these phases, extensive study is required for giving convincing recommendations. Due to paucity of time, I have unable to do it. However, this is what separates wheat from chaff resulting in outperformance over longer timeframe.

TOTAL LEVERAGE OF ABOVE NEW TRADE RECOMMENDATIONS: NA

COMBINED PROFIT POTENTIAL FOR ABOVE TRADES: NA

TIME WINDOW OF TRADES: 7 DAYS TO 60 DAYS.

TOTAL LEVERAGE INCLUDING UNCLOSED POSITIONS AS PER PREVIOUS RECOMMENDATION: 1.0

RETURNS TILL DATE SINCE 04.07.20 : 33.42%

TRADE RECOMMENDATION LOG.pdf

Download PDF • 580KB