QUANT SYSTEM TRADE RECOMMENDATION - 25.07.21

From the desk of Capt.D.Ganesh Raja

Dear Friends,

The rangebound movement in Nifty is continuing. Typically as I have been saying one can make a decent profit by shorting in the upper end of the range and going long in the lower end, using intraday trading systems for decision making.

I did a Elliot wave count and if I choose to ignore the pattern formation from 20.03.21 to 29.05.20 and subsequent breakout which marked the beginning of a spectacular uptrend, the currently wave 5 is in progress as per weekly charts. End of wave 5 generally marks the end of the uptrend for the timeframe one is looking at.

But if I take into account the pattern formation then it could be a alpha wave of a new trend after a zig-zag correction which took place from 19.02.21 to 23.04.21.

Does it seem that I am trying to confuse the readers?! Correct me if I am wrong but I have been practicing this for 20 years and ambiguity in wave count does happen quite often. I try to resolve the ambiguity using various other proprietary indicators and confirmation from macroeconomic indicators which are treated in a unique way using Quant system filters.

So for now digesting all this information, I recommend to go short on Nifty, which favours the reward to risk. Shorting market tops is dangerous business and one can get trapped if one goes wrong, but who said trading is easy?!

I had also spoken about sector rotation taking place and winners can be spotted by doing deep research into those sectors / stocks. My time constraint does not permit me to do it now.

Gold: For short term traders there is a bias to short Gold but needs monitoring on daily chart. As per weekly charts Gold is forming a pattern consolidation to determine the course of long-term trend.

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.

Investors can start investing in this sector based on their own research and reputed builders, but it is better to consult a CA for tax implications and possible change in Government regulations, before taking a decision.

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 – 15856.05 . Recommended to short Nifty between 15920-15960 with stop loss at 16050. The bounce can only be monitored on daily charts to take a trading decision which I what I used to do when I managed prop trades but here I can only suggest the levels.

Target1 – 15450, Target 2 – NA, Leverage 1.0x.

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

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

GOLD: Last close – 47534.0. This is only for short term traders. Short Gold between 47760-47934 with a stop loss at 48295.0.

Target1 – 46546.0, Target 2 – NA, Leverage 0.3x.

Minimum profit potential – 2.5%. Asset allocation profit potential – 0.8%.

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

EXISTING TRADE RECOMMENDATION OVERVIEW

1. INDIAN HOTELS: LAST CLOSE – 146.75. Recommended to go long at 147.45 on 27.06.21 with stop loss at 131.35 and presently an absolute loss of 0.47%. 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 – 246.40. Recommended to go long at 222.30 on 27.06.21 with stop loss at 198.25 and presently an absolute profit of 10.84%. 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: Up, Intermediate trend – Up, Long term trend – Up.

NEW TRADE RECOMMENDATION

1. BANK NIFTY: LAST CLOSE – 35034.40. Recommended to short at these levels with stop loss at 35350.0.

Target1 – 33642.0, Target 2 – NA, Leverage 0.30x.

Minimum profit potential – 4.0%. Asset allocation profit potential – 1.2%.

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

2. CIPLA: LAST CLOSE – 948.0. Recommended to go short if there is a minor bounce between 957-965 levels with a stop loss at 981.0. Traders should monitor these levels and take position accordingly.

Target1 – 920.0, Target 2 – NA, Leverage 0.10x.

Minimum profit potential –3.9%. Asset allocation profit potential – 0.39%.

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

3. INFOSYS: LAST CLOSE – 1590.85. Recommended to go long at these levels with stop loss at 1560.00.

Target1 – 1722.0, Target 2 – NA, Leverage 0.20x.

Minimum profit potential –8.2%. Asset allocation profit potential – 1.6%.

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

TOTAL LEVERAGE OF ABOVE NEW TRADE RECOMMENDATIONS: 1.9

COMBINED PROFIT POTENTIAL FOR ABOVE TRADES: 6.9%

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 : 33.89%

TRADE RECOMMENDATION LOG.pdf

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