Skip to main content

Tech Update: ITC, Sesa Goa Show Losses, RCOM Succeeds, and a Hindalco Trade

Deepak Shenoy2 min read
Quick Facts
What is "Tech Update: ITC, Sesa Goa Show Losses, RCOM Succeeds, and a Hindalco Trade" about?
What category is this article in?
Charts And Analysis
Who wrote this article?
Deepak Shenoy, Capitalmind's research team.
When was this article published?
Published 28 October 2013.
How long does this article take to read?
2 min read
What topics does this article cover?
Technical Analysis
What does the "Scorecard:" section say?
Oct 26: ITC hits Stop Loss (-3%), Sesa Goa Stop Loss (-6%) and RCOM Books +3% (This Post) Also, Hindalco shows +7% as well. Oct 4: ITC and RCOM Short Entries, Sesa Goa stays open. Oct 1: Tata Steel exits at +6%, TCS call write expires worthless (+3%), Sesa Goa Entry Sep 18: Tata Steel and TCS short entries spotted, short fut and a call write, respectively. 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. (+32% 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%)

An update on the technical strategy: the ITC trade mentioned in the last post hit a stop loss (mentioned this on twitter) at 348 after which, the stock went on its way and boom:

image

Remember the idea is:

  • Stock traverses up (or down) one band.

  • It then reverses direction and then tries to go back in the original direction, but this time reverses again before it touches the original bollinger band.

  • A confirmation is required, I use a MACD crossover.

My exit was early and not really systematic, but the stop loss was experimented as a function of a recent low after the trade. (It had fallen as low as 334, and a 14 point rebound to 348 was enough to get me out of the trade).

RCOM too, has exited at 145 after triggering a short at 149. However, I didn’t take this trade as the size of the loss was too large for a strategy I am only testing with (can’t have disproportionate wins and losses)

image

Finally, the Sesa Goa Trade too has had stop losses, like ITC. I didn’t trade that set up too, don’t really know why. The trade lost 6% as the stock bounced from the 180 levels (

image

In the meantime during my Gurgaon trip, one excellent move came in without my having to do much: Hindalco . Hindalco fell 7% in a very quick short trade:

image

Btw, I realized I left the BHEL entry open, but it was closed at 147 a while back. Apologies for not mentioning it.

I have no positions on this strategy at the moment. I have also been testing this on the hourly timeframes with success, but all of them have exited. Looking at Cipla (long) and L&T (short) if the signals come.

So the overall system has done, in three months:

  • 10 trades, 8 positive, 2 negative.

  • Average holding period: less than 10 trading days

  • Average win (9.8% - includes an outlier of +32% in BHEL, +6.4% if outlier ignored)

  • Average loss (-5.2%)

Scorecard:

Tagged:Technical Analysis