Systematic Momentum and Pullback Swing Trading

[spn1305]

Short setup triggered in Nifty, for those who trade FnO.

 

[spn1305]

Axis Bank short setup triggered and reached 1R.

 

[spn1305]

The rally in the oil stocks which were falling earlier could be a clue that Nifty might be looking to move up, perhaps break its upside opening range. If I was trading it, I would tighten stops

 

[spn1305]

Nifty choppy as expected. Crossed opening range high.

 

[TracerBullet]

Axis Bank short setup triggered and reached 1R.

Are you executing these trades ? These kind of small couple-of-bars kind of trades may be feasible in global markets with low cost and slippages or perhaps on Daily TF. But in intraday stocks here, costs and slippages will likely burn through your edge. And your trade size too will be larger with small stops. All the best ..

 

[spn1305]

Are you executing these trades ? These kind of small couple-of-bars kind of trades may be feasible in global markets with low cost and slippages or perhaps on Daily TF. But in intraday stocks here, costs and slippages will likely burn through your edge. And your trade size too will be larger with small stops. All the best ..

So far, that has indeed been my experience with day trades in Indian equities. What I am doing now is using the framework for setups to use in stocks with a high probability of trending for the day. This is done using the pre open insights, looking at opening ranges, and trading only the open. This significantly reduces the potential number of trades, and the cumulative impact of slippage.

 

[spn1305]

Adding Lupin, UPL, HCLT to the watchlist.
Link to the screener: https://chartink.com/screener/inside-bar-high-setup

 

[spn1305]

Aurobindo Pharma added to watchlist.

Reliance long triggered.

By the way, does anyone here have experience in commodities, particularly silver? I was considering trading the setup on 15m/1h charts of silver, wanted to know about slippages.

 

[spn1305]

How's everyone doing? I haven't been posting since I've been working on our website design and creating Relative Rotation Graphs on Excel, will try to be more consistent here! I have been trading though. SHIB is going well. Any of you tracking the screen and the names coming up?
Just thought I'd introduce another setup since it's the weekend. This is a weekly pullback trading system. I call it the 12MA weekly setup.

I myself haven't been taking many setups of these primarily because stop sizes had become huge over the past few weeks because of the volatility. However, I've been seeing some tradeable setups since last week, hence thought it would be a good time to write about it.

It's a pretty simple system. The idea is to buy strong stocks on a pullback. How do we define strong? How do we define a pullback?

We define strong as a stock correcting after it's made an all-time high. Simple enough?
We define a pullback using the 12 period moving average on a weekly chart. Why 12? Nothing magical about it, just that a 12MA on a weekly chart is a stock's quarterly moving average.

Here's the link to the chartink screen that I've been using:

https://chartink.com/screener/weekly-12ma

And a valid, live setup from this week (today) on a chart to give you a better idea:

Relaxo Footwears weekly chart. We can see that after forming an all time high, it corrected below the 12MA, and this week it closed above the 12MA. The entry is on a break of the high, and stop losses are generally the most logical nearby swing low. Since holding periods are longer for this setup, we can be flexible (but in a systematic manner) with stops and use fundamental filters to take better setups. Same for exits, I take half out at 1R and the rest at 2R if the stop size is big, otherwise I trail the second half.

Have a look at the chartink screen and let's discuss what interesting setups we can take next week.

Cheers,
Smeet.

 

[spn1305]

Okay so these are the names in the 12MA weekly screen for the coming week. I'll go through them one by one to give you a better idea of the filteration process.

1. Granules India: Strong stock fundamentally. Pharma is doing quite well too. I avoided taking a setup a few weeks back when it had come up on the watchlist because stop size was huge. It's more reasonable now. Adding to watchlist, can buy above 174.5 with SL of 154.

2. Relaxo footwears: Fundamentally strong. Setup posted above. Buy above 680 with SL 580.

3. CDSL: I do see potential for share price appreciation, but will stick to high quality momentum names and avoid this one since it's not a recovery after an all time high.

4. India Glycols: Downtrend.

5. Krebs Biochem: Downtrend.

6. Elgi Rubber: Downtrend.

7. Ashapura Minechem: Downtrend.

8. Amber Enterprises: Nature of business is cyclical but setup is valid. Adding to watchlist. Can buy above 1225 with SL of 1055.

9. Thyrocare Technologies: DT.

10. Wabco India: DT.

11. R systems International: Numbers seem fine and setup is valid. I'm bullish on IT. Adding to watchlist. Can buy above 91 with SL of 81.

12. Orissa Minerals Development: DT

Summary: Adding Granules India, Relaxo Footwears, Amber Enterprises and R Systems to watchlist. From the previous week I had Poly Medicure, MCX, and Bharat Rasayan on my watchlist. None of them had triggered. Removing Bharat Rasayan as it doesn't fit the criteria now (closed below MA).

https://chartink.com/screener/weekly-12ma

Link to the screener^ have a look and decide if you could take any setups, depending on how your portfolio is weighted and your fundamental views.

SHIB is going well. Open positions in Aurobindo and Lupin right now. I'm toying around with the idea of placing stops based on a lower timeframe to improve risk reward.

-Smeet