QUANT SYSTEM TRADE UPDATE - 20.03.22

From the desk of Capt.D.Ganesh Raja

Dear Friends,

I will start with the domestic markets first. Nifty last closed at 17287.05. As of now there is not enough confirmation to give fresh recommendations and there is still a downside bias. There might be some more up move probably till 17500. My short recommendation in Nifty for intermediate timeframe, given on 08.02.22 still holds, though it is almost at the same levels. You might ask why I did not recommend to take profits at lower levels but since the system has not given exit in intermediate timeframe, I have to adhere to it. I did give a short recommendation on 02.03.22 and asked to book profit at 15863.15 on 07.03.22, generating 4.47% profit. Riding an intermediate trend is little different than trading a short term swing. I was trying to demonstrate versatility of the system.

India VIX is falling on weekly chart but still above pivotal level of 20 and also moving average crossover signal towards upside, an event which has not happened since 28.02.2020, so believing that correction has ended in the market based on last two week’s up move would be premature. Most probably it was a sharp short covering rally.

Having said that breach below 15000 levels seems unlikely. We will take guesswork out of this and take things as they come.

Gold: Last close – 51,147.0. Gold corrected in expected lines and people who missed the initial breakout can utilize this dip to accumulate for the long term. As I have been saying for quite some time that Gold is a must in anyone’s portfolio. Intermediate uptrend in Gold is still intact. Let me reiterate here that the real long term multi-year bull market signal in Gold is about to emerge this month. Readers can quote me on this later.

Gold is a buy even in international markets, which is currently quoting at USD 1921.9 per ounce at the time of writing this blog. In the trading competition I have built long positions in Gold and might add to it in coming days. The challenge I am facing is, I am unable to devote full time to the markets due to my shipping assignments, something which would be difficult to convince others. Nevertheless, within the constraints I am putting my best efforts.

Now coming to international markets, these are pretty challenging times. The DJIA and Nasdaq Composite index are in sync and moving downwards. The Nasdaq Composite chart looks structurally weak and “Death cross” moving average crossover signal has happened on 22.02.22. The indices were highly oversold and I had bought some call options in the trading competition which has yielded 136.72% profits in a few days. I might unwind my position tomorrow since time value theta would drop sharply from here onwards.

The commodity index is in a strong uptrend and that doesn’t paint a good picture for economies, who are banking on post Covid economic growth since higher commodity prices might trigger higher inflation, which in turn might prompt Central Banks to raise interest rates. I will try to look into certain specific factors going forward using proprietary filters, to ascertain the impact.

RETURNS TILL DATE SINCE 04.07.20 : 62.91% (AS OF MONDAY 07.03.22 CLOSING)

TRADE RECOMMENDATION LOG.pdf

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