QUANT SYSTEM TRADE RECOMMENDATION - 21.05.23
- Capt D. Ganesh Raja
- May 22, 2023
- 5 min read
From the desk of Capt.D.Ganesh Raja
DISCLAIMER
Please be informed that the author of this blog by Capt Ganesh Raja Dhanuskodi (Hereinafter called Capt Ganesh) is not a SEBI registered Research Analyst or Financial Advisor. Capt Ganesh writes this blog to express his views based of more than two decades of experience in capital markets and based on the Quant system which he has invented and he does not do this for “consideration” as per SEBI regulations, which means he does not receive economic benefit through it. Readers of this blog must seek advice from registered Investment Advisors / Research Analysts before taking any trading or investment decisions.
Capt Ganesh has been investing and trading actively since 2001, building trading models since 2013 and has invented an AI based intraday trading system, which has a pending patent approval.
Dear Friends,
From now on I will get busy in a few activities like clearing the Research Analyst examination and working on presentations regarding this Quant system and also AI based intraday system, on which I am simultaneously working for speedy completion. In addition, I am going to devote time to research and pick fundamentally strong stocks for my personal portfolio. I will update, if there is an exit in a particular recommendation or if any new system signal is generated through a brief post. Kindly download and check the TRADE RECOMMENDATION LOG regularly, which is easier for me to update and post.
I might not have said before , that doing core research and picking long term growth stocks, is my strength too and that is what I used to do before I got busy with my AI system project. Here are few of my multi-baggers which I have picked over the years:
STOCK
YEAR BOUGHT
BUY PRICE
YEAR SOLD
SELL PRICE / CURRENT PRICE
NO. OF TIMES RETURNS
CAGR(%)
REMARKS
RELIANCE INDS
2008
360.00
2022
2650.00
7.36
15.32
KALPATARU POWER
2005
16.00
2023
540.00
33.75
20.34
JK LAKSHMI CEMENT
2006
80.00
NA
776.50
9.70
14.30
STILL HOLDING
ACTION CONSTRUCTION
2006
36.00
NA
463.00
12.86
16.21
STILL HOLDING
NILKAMAL LTD.
2013
101.50
2016
1220.00
12.01
129.06
KARUR VYSYA BANK
2006
7.00
NA
104.65
14.95
17.24
STILL HOLDING
Needless to say, that I had my fair share of duds in my portfolio like Jain Irrigation, Vishal Retail, Bartronics, Sibar Software etc. Any investor would face the hurdle of ending up with a dud stock, once in a while in spite of best efforts and research.
Now let us get on with market discussions. Here is a puzzle : Dow is falling , Nasdaq is gaining, Gold futures finished lowest in more than seven weeks, the U.S. dollar, which rallied to a two-month high on Thursday, German DAX hits record high.
I can keep adding these parameters into this puzzle but it can get too complicated and no point in doing it.
The intended purpose of US sanction on Russia doesn’t seem to be working because in addition to record imports by India, hitherto major oil exporters like Saudi Arabia and the UAE are importing discounted Russian oil, both for consumption and refining, and exporting their own oil at market prices to make a profit, despite US opposition.
It is worth noting that the prices of Urals crude is still significantly lower than the prices of Brent crude, the global oil benchmark, which is currently trading at nearly $75.0/barrel.
You all might be reading about the likelihood of a U.S. default but it still appears to be a long shot, however concerns have been growing. Treasury Secretary Janet Yellen reiterated a warning on Monday from early May that a U.S. default could happen as soon as June 1 unless Congress raises the federal government’s borrowing limit.
On Tuesday Yellen said the "Livelihoods of millions of Americans" and the U.S. economy "hands in the balance," if lawmakers don't act.
Reganti, formerly a deputy director at the Treasury’s office of debt management from 2011-2015, warned of extreme turmoil in financial markets if the U.S. defaults, or even it begins to miss debt payments. “You have real problems if that ecosystem become destabilized.”
“Our base case is that the debt-ceiling is raised,” Reganti told MarketWatch.
Is this a solution or a veiled threat to the global financial system? It is anybody’s guess. So basically, every once in a while, this would keep recurring which I view as brushing the dirt under the carpet. CBOE VIX is at 16.35, which is a normal market condition reading and there is no panic as such.
As far as Indian markets are concerned there is not indications of an exit as per system. 10 year Government Security index is continuing its strong uptrend. India VIX is currently placed at 12.30 after touching lows of 10.78. In my post dated 23.04.23 I had mentioned that we might see the levels of 10.35 and we did reach close to that. As per my proprietary filters there is no indication yet regarding the flare up in VIX.
The gaining of strength of USD against Indian rupee might seem to be causing concern to domestic inflation but the crude import arrangement with Russia at discounted prices might act as a cushion.
USD/ INR: Last close – 82.75. I am going to watch this currency pair closely since there might be a buy trigger in USD . Watch for my update on this later.
GOLD MCX: Last close – 60379.0. It seems Gold might consolidate on a narrow band of 58,400 to 61,800 till July 2023. There is a system indication to reduce trade exposure to Gold for now from present 0.9X to 0.3X and I have updated the TRADE RECOMMENDATION LOG accordingly. I am still not selling my long term personal holding in Gold and same goes for readers. But with respect to trading we are booking profit on increased exposure, that’s all. I had given buy recommendation in Gold on 22.10.21 (0.3X leverage), 08.02.22 (0.2X leverage) and 07.08.22(0.4X leverage), delivering returns of 26.32%, 25.01% and 17.58% respectively, translates into annualized returns of 14.76%, 18.00% and 27.24%. Weighted average annual return works out to 18.81%. Weather these returns are respectable or not on a widely traded asset like Gold is for readers to decide. Readers might also note that the higher leverage trade recommendation given on 07.0822 , gave the maximum returns. I have explained before that leverage is part of the system.
NIFTY: Last close – 18203.40. As discussed above, there has been no system exit.
NASDAQ COMPOSITE: Last close – 12657.90. The system buy signal is given on 20.03.23 still remains valid.
UPDATE ON PREVIOUS STOCK RECOMMENDATIONS
1. ULTRATECH: Last close – 7681.30. System exit has been triggered as of Friday close for the long recommendation given on 09.04.23..This trade has resulted in an absolute loss of -0.27% and asset allocation loss of -0.03%.
2. TATA COMMUNICATIONS: Last close – 1233.20. System exit has been triggered as of Friday close for the Long recommendation given on 31.03.23. This trade in an absolute loss of -0.99% and asset allocation loss of -0.15%.
The following stocks & indices recommendations still remain valid and recommended to hold position:
TITAN, ARVIND, GRASIM, L&T & INDIAN HOTELS.
NEW TRADE RECOMMENDATION: Please watch this space for further updates during the week and also TRADE RECOMMENDATION LOG.
1. KARUR VYSYA BANK: Last close – 105.0. Recommended to go long as these levels, with stop loss 90.0.
Target 1 : 138.0, Target 2 : 164.0 Leverage – 0.15x
Minimum profit potential – 31.40% , Asset allocation profit potential – 4.7%.
Minor trend : Up, Intermediate trend : Up, Long term : Neutral with upward bias.
2. HDFC BANK: Last close – 1646.90. It is recommended to go short at these levels with stop loss at 1720.0.
Target 1 – 1574.0 , Target 2 – 1540.0, Leverage – 0.10x.
Minimum profit potential – 4.4% , Asset allocation profit potential – 0.40%.
Minor trend : Down, Intermediate trend : Neutral , Long term trend : Neutral, with
downward bias.
RETURNS TILL DATE SINCE 04.07.20 : 83.07% (AS OF FRIDAY 19.05.23 CLOSING)
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