From the last ACC close we do seem to have some intermediate short positions showing in the MACD+Bollinger Reject system. (HT @anayash and reader Himanshu)
The MACD crossover happened yesterday and there is a potential reject. The stop loss is wide – around 318 at the upper BB, which is why I would be a little careful on this trade. I would maintain a part stop around the 306 level (which is 5% above), but the real stop is 318 today (and it will change and the band changes).
The 272 retracement is an intermediate target. If it takes a few days to get there the lower band is likely to move up there (and that’s the real target).
Another setup is TCS (HT @higirish):
I’m not extremely confident of this either as the reject is not apparent. Effectively this is only the MACD that presents the trade.
But a stop at 2000 makes it lower risk to take it. It may be better, however, to write calls above 2000 (current value: 29) instead. The implied volatilities nowadays are juicy enough and the setup isn’t showing the strength that it should.
Past trades on this system:
- Sep 06: ACC entry spotted at 976, which has exited on Sep 11 around 1048. (+7%)
- Aug 23: BHEL entry spotted at 108, which shows promise to 140, but doesn’t close the gap. Partial exit at 142, looking for 147. (+35% if done right. I didn’t).
- Aug 06: Airtel Short Setup at 326, and exits at 304 (+7%)
- Jul 29: Nifty Short Setup at 5886, and exits around 5542. (+6%)
(Note: This is not advice, obviously. And this system hasn’t shown me a stop loss in the last five trades, so by the law of averages, it should hit a stop on at least one trade!)