QUANT SYSTEM TRADE RECOMMENDATION - 27.06.21
- Capt D. Ganesh Raja
- Jun 27, 2021
- 7 min read
From the desk of Capt.D.Ganesh Raja
Dear Friends,
The market movement has generally been sluggish except for pickup towards end of the week. There are no indications as of yet to shun long position in Nifty. There is a narrow resistance band between 15854-15965, which the market is probing. Probing price levels is a very interesting phenomena discussed in detail by Peter Standelmayer in his pioneering work in Market Profile. It is not a casual reading but needs intense interest in the subject to follow it. It clearly describes the underlying structure of the market action. When I was trying various methods and trying to learn different techniques, I had studied Market Profile in detail. One of Peter Standelmayer’s quote which I remember clearly is “The heart of all market activity is perception of value”. This is a very significant statement which says so much in so little. If you can think deep, you can understand the meaning. Nobody knows the absolute value but always the perception of it and market action determines whether it is right or wrong.
So, for now existing positions have to be held and even if some exits have to be taken in individual stocks it will be weighed during the coming week. One of the system reading is that the churn in the markets from 15.02.21 to 04.05.21, from which this trend emerged has paused in daily charts. As per price-time congruence I would recommend to carefully watch market action between dates 08.07.21 to 22.07.21. Keeping this factor in mind I don’t see immediate threat to the uptrend as of now and in all likelihood it should resume.
Gold: In daily charts Gold is correcting downwards but in weekly charts it is forming a pattern to determine future course of action. So for long term investors again we will be entering into an accumulation zone. Short term traders can short Gold as indicated below.
Silver: Silver is also indicating a short side trade but due to large volatility which necessitates monitoring on daily system to profit from such trades I refrain from making that recommendation. Safety of capital is a greater priority that profit. This principle will avoid many a pitfall in a Trader’s journey.
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 – 15860.35. 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 7.0%. Short term traders can keep a stop loss at 15772.0 and add to long position at these levels for a target of 16050.0, with 0.5x leverage.
Target 1 – 15350.0 (Achieved), Target 2 – 15535.0 (Achieved), Target 3 – 15834 (Achieved), Target 4 - 16050Leverage 1.0x
Minimum profit potential – 3.5% (Achieved). Asset allocation profit potential – 3.5% (Achieved).
Minor trend: Neutral, Intermediate trend – Up, Long term trend – Up.
GOLD: LAST CLOSE – 46921.0. Go short at these levels, with a stop loss at 47378.0.
Target 1 – 45694.0, Target 2 – NA
Minimum profit potential – 2.6% . Asset allocation profit potential – 0.8%.
Minor trend: Down, Intermediate trend – Neutral, Long term trend – Up.
EXISTING TRADE RECOMMENDATION OVERVIEW
1. BAJAJ AUTO: LAST CLOSE – 4196.15. 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 8.8%. Target 1 was achieved on 27.05.21. Positional traders can continue to hold long position.
Target 1 : 4231.0 (Achieved), Target 2 – 4425.0, Target 3 – 4400.0, Target 4 – 4950.0
Minimum profit potential – 9.7% (Achieved). Asset allocation profit potential – 1.5%.
Minor trend: Neutral, Intermediate trend – Neutral, Long term trend – Up.
2. BPCL: LAST CLOSE – 470.05. 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 6.07%. Target 1 was achieved on 27.05.21 but continue to hold long position, with profit protection stop at 467.00.
Target1 – 480.0 (Achieved), Target 2 – 533.0, Leverage 0.15x.
Minimum profit potential – 8.3% (Achieved). Asset allocation profit potential – 1.20%.
Minor trend: Neutral, Intermediate trend – Neutral, Long term trend – Up.
3. DLF: LAST CLOSE – 293.90. Recommended to go long around 270.0 levels on 23.05.21with stop loss at 250.0 and presently at an absolute profit of 8.85%. Target 1 was achieved on 08.06.21. Continue to hold long position.
Target1 – 304.10, (Achieved) Target 2 – 323.35, Leverage 0.05x.
Minimum profit potential – 12.0%. Asset allocation profit potential – 1.5%.
Minor trend: Neutral, Intermediate trend – Neutral, Long term trend – Up.
4. LIC HSG. FIN, LAST CLOSE – 467.40. Recommended to go long at 456.05 on 23.05.21 with stop loss at 420.0 and presently at an absolute profit of 2.55%. Target 1 has been achieved on 04.06.21. I had recommended to hold long position, with profit protection stop at 480.58, but would recommend to continue to hold long position.
Target1 – 500.10 (Achieved), Target 2 – 566.20, Leverage 0.10x.
Minimum profit potential – 9.6%. Asset allocation profit potential – 1.0%.
Minor trend: Down , Intermediate trend – Up, Long term trend – Up.
6. L&T: LAST CLOSE – 1523.85. Recommended to go long at 1418.05 on 23.05.21 with stop loss at 1368.20 and presently at an absolute profit of 7.46 %. Target 1 has been achieved on 04.06.21 but continue to hold long position, with profit protection stop at 1482.0.
Target1 – 1521.10 (Achieved), 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.
7. TATA MOTORS: LAST CLOSE – 339.65. Recommended to go long at 313.10 on 30.05.21 with stop loss at 285.0 and at presently an absolute profit of 7.76%. Continue to hold long position.
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, Long term trend – Up.
8. RELIANCE INDUSTRIES: LAST CLOSE – 2225.65. Recommended to go long at 2094.80 on 30.05.21 with stop loss at 1990.0 and at presently an absolute profit of 0.46%. Target 1 was achieved on 03.06.21 but I had recommended to continue to holding long position. This trade has given up large portion of the profit, It has become overbought to oversold on the oscillators very quickly and hence exit in the stock might happen in the coming week during minor bounce. We might get a re-entry in the stock once it stabilizes.
Target1 – 2200.0 (Achieved), Target 2 – 2320.0, Leverage 0.20x.
Minimum profit potential – 5.0%. Asset allocation profit potential – 1.0%.
Minor trend: Down, Intermediate trend – Neutral, Long term trend –Up.
NEW TRADE RECOMMENDATION
1. INDIAN HOTELS: LAST CLOSE – 147.45. Go long at these levels with stop loss at 131.35. This is a long-term positional trade where patience is key in addition to the possibility of periodically giving up good amount of profit.
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 – 222.6. Go long at these levels or a price band of 2% up or down, with a stop loss of 198.25.
Target1 – 300.0, Target 2 – NA, Leverage 0.10x.
Minimum profit potential – 35.0%. Asset allocation profit potential – 3.5%.
Minor trend: Down , Intermediate trend – Up, Long term trend – Up.
3. BRITTANIA INDUSTRIES: LAST CLOSE- 3689.10. Go long at these levels with a stop loss of 3510.45.
Target1 – 3893.45, Target 2 – 4201.0, Leverage 0.15x.
Minimum profit potential – 6.1%. Asset allocation profit potential – 0.9%.
Minor trend: Up , Intermediate trend – Up, Long term trend – Up.
4. HDFC BANK: LAST CLOSE- 1506.25. Go long at these levels with a stop loss of 1478.5.
Target1 – 1561.63, Target 2 – NA, Leverage 0.20x.
Minimum profit potential – 3.3%. Asset allocation profit potential – 0.7%.
Minor trend: Up , Intermediate trend – Up, Long term trend – Up.
SOME EXTRA TRADE RECOMMENDATIONS
System has thrown up some more trade signals which I am sharing but not including in the main system-based recommendations since leverage is an integral part of it and upper limit on system leverage has been reached. People who follow these stocks can take position based on these. Leverage is not mentioned in these trades since it would depend on person taking the trade.
A general word of caution when shorting on a bounce it has to be watched very carefully using myriad daily filters which gives increases the accuracy.
1. TCS: LAST CLOSE- 3373.6. Go long at these levels with a stop loss at 3278.0
Target1 – 3453.0, Target 2 – 3550.0.
Minimum profit potential – 2.4%..
Minor trend: Up , Intermediate trend – Up, Long term trend – Up.
2. ULTRATECH CEMENT: LAST CLOSE- 6923.0. Go long if price dips slightly to 6868.0-6898.0 levels with stop loss at 6751.0
Target1 – 7131.0, Target 2 – 7400.0.
Minimum profit potential – 3.4%.
Minor trend: Up , Intermediate trend – Up, Long term trend – Up.
3. JSW STEEL: LAST CLOSE – 679.0. Go short if prices bounce to 687.0 levels with stop loss at 696.0.
Target1 – 637.0, Target 2 – NA.
Minimum profit potential – 6.2%.
Minor trend: Down, Intermediate trend – Neutral, Long term trend – Up.
4. ADANI PORT: LAST CLOSE – 712.20. Go short at these levels with stop loss at 738.66.
Target1 – 643.0, Target 2 – NA.
Minimum profit potential – 9.7%.
Minor trend: Down, Intermediate trend – Down, Long term trend – Neutral.
TOTAL LEVERAGE OF ABOVE NEW TRADE RECOMMENDATIONS: 1.3
COMBINED PROFIT POTENTIAL FOR ABOVE TRADES: 7.5%
TIME WINDOW OF TRADES: 7 DAYS TO 60 DAYS.
TOTAL LEVERAGE INCLUDING UNCLOSED POSITIONS AS PER PREVIOUS RECOMMENDATION: 3.30
RETURNS TILL DATE SINCE 04.07.20 : 38.83%
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