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I like (not love) BHARTIHEX long @ 1329.25

已更新

There's nothing I really LOVE on the NSE for today, but several names that are oversold and that I think I'd maybe trade if I could. Of those, BHARTIHEX is maybe a tiny bit better bet than the others. I definitely wouldn't go all in on it though. Well, I never do on a trade, that's not how I roll. I'm tactical DCA or die. Especially in this case. While it is in a nice general uptrend, it did break through its uptrend line to the downside. How far it goes below that is anyone's guess.

It doesn't have a long trading record, and I don't like that. But what record it does have has been that it tends to bounce back fairly quickly and sometimes significantly when it is oversold. It also has some support in the 1290-1300 area which is what gives it the edge in my book over the other possible names to trade today.

I would not, however, reach to get in on this. If I couldn't get it for Friday's closing price or cheaper, I'd look elsewhere today. Plus, I have no idea what the general market sentiment is there on this Monday, so that makes me extra cautious.

On the plus side, you can see it broke below the bottom of the regression channel Friday, but rallied back to close within it. That's a positive trend continuation sign in my book. It was also oversold on Thursday before Friday's 2.72% drop, so I'd already be getting it at a "discount" and one day closer to its eventual bounce back out of oversold territory if I opened a position at the level of Friday's close.

So IF I could get in at any point today for 1329 .25, pretend I'm long. Otherwise, I'll sit out today and watch my picks in London and especially New York do their things. I hope your trading week starts well!

Per my usual strategy, once I'm in I'll add at the close on any day it is still oversold and I will use FPC (first profitable close) to exit any lot on the day it closes at any profit.

As always - this is intended as "edutainment" and my perspective on what I am or would be doing, not a recommendation for you to buy or sell. Act accordingly and invest at your own risk. DYOR and only make investments that make good financial sense for you in your current situation.

交易开始

I would have added another lot at the close for 1322.55 because it is still oversold.

Lots currently held:
1329.25
1322.55

注释

Algo is still flashing "buy" so I'm still buying. I'd have added 1 lot at 1308.65 at the close. Support is still intact, that's a positive. Just a couple of weeks ago it had a 4 days down streak and popped, so that possibility is still intact as well. In fact, even 5 consecutive down days often comes with a pop or a streak of winning days after it, so I wouldn't even rate this as a neutral situation yet.

This is, however, the longest streak of buy signals in the stock's short albeit history, which isn't ever desirable and the reason I wasn't in love with this pick to begin with. A year from now, big runs of down days might be considered normal and I normally wouldn't go near it if that was the case. Stocks without track records are "dangerous" in that respect. I always prefer trading stocks with long histories and known reactions to hard times. I know so little about Indian stocks in general that I'm sort of flying blind here anyway.

But I trust my algo implicitly, and I don't doubt at all that each of these trades will turn out positively. The only question becomes how long that will take. But it has only been 3 days and these trades frequently can take two weeks or more to play out. As long as the return per day held ends up solidly above average market per day returns, I'm happy in the end.

注释

I'd have sold the lot bought the previous day (1308.65) at today's close for 1319.65. That's a gain of 0.84% in 1 trading day. That leaves me with two still unprofitable lots, but this sale basically reduces their cost. Like dollar cost averaging, only I'm locking in the average cost reduction of the remaining lots while not exposing me to more market risk like traditional DCA does.

Still holding lots "purchased" at:

1329.25
1322.55

交易结束：到达目标

And there it is...the pop. Much bigger than most, but I'd be collecting nonetheless if I was able to actually trade this one. The VAST majority of these trades are done in under two weeks and this one was no exception. While 1 day wonders are still the most frequent result, a week long trade like this one is a very common and normal turn of events. Chalk another win up for the NSE.

I'd have closed the position entirely at the closing price of 1376.20. The three total lots purchased would have performed as follows:

Lot 1: +3.53% in 5 trading days
Lot 2: +4.06% in 4 trading days
Lot 3: +0.84% in 1 trading day

That's a much better than normal average daily return than I'm used to, but the average daily return of the NSE over the last 20 years is 70% better than the average in the US, so I guess it's still a good trade for India, but not as ridiculously good as it looks to a US trader from the other side of the globe. Regardless, a nice way to start off the end of what has been a very solid trading week overall.

注释

Trade summary for my records

Wins 3
Losses 0

Average gain per lot: +2.81%
Average holding time per lot: 3.33 trading days
Average return per lot per day held = +0.84%
Annualized return = 0.84% x 250 = +210%

redwingcoach