I have posted Bullish stocks with probable targets last week. https://fnocafe.blogspot.com/2020/04/bullish-bets-for-coming-week-apr-13-17.html
Performance of stocks as on Apr 17, 2020 is posted below
RBL -RBLBNK
Out of 14 stocks
Tgt 3 achieved:- 1
Close to Tgt 3:- 1
Tgt 2 achieved:- 2
Close to Tgt 2:- 1(Bharatforg 2 points from Tgt 2)
Tgt 1 achieved:- 2
Close to Tgt 1:- 2
Did not reach even Tgt 1 yet:- 5
Out of 14 stocks, 13 closed positive from the closing price on Apr 9 and 1 stock did not perform at all and closed negative from Apr 9 price (CANBK). Out of 5 stocks that did not reach target 1, they still achieved more than 10% gain.
But it will be important to find out how many stocks really gave good trade set up where Stop Loss (SL) was not too far from entry and Risk Reward Ratio (RRR) was good enough to justify a trade.
I will analyse a few stocks to explain the above idea. I will try to find trade set up based on an hourly and 15 min chart on/after Apr 13. Let's start with NCC that perform extraordinarily in terms of gain.
NCC:
The hourly chart shows, on Apr 13, NCC fell at 9.15am(Red candle) and made High of 20.5 and Low of 19.65. Hourly RSI took support at a line that has previously acted as a resistance. So the hourly chart showed the possibility of reversal and up move.
Before we look for entry possibility based on the 15 min chart, we need to find SL for trade so that we get an entry point that fits our RRR. Minimum RRR should be 1:2, which is for the risk of Re 1, profit should be 2. Our first target price is our minimum profit potential. So let us do that calculation for NCC.
Risk Reward Calculations:
SL = 19.3 or 19.55 (I will prefer 19.3 just below low of 19.4 shown on the hourly chart)
First Target price = 23
So we will take trade only if we get entry at or below 20.55 OR 20.7( Little upside is acceptable-20.6/20.75)
Position Sizing:
Another point is absolute money risk in the trade. In this case, our risk is Rs. 1.25/share. So we will have adjust position size in case of cash trade depending on our risk appetite per trade. Suppose we do not want to loose more than Rs.5000/- per trade, then max number of shares we can buy (5000/1.25) 4000 no (This does not take into account Gap down risk in case of overnight position).
In case of stock future trade this risk would very high. In case of NCC (Lot size = 9000 no). So per lot risk will be 9000*1.25 = 11250/-. (Holding position overnight will have higher risk, incase of Big gap down, if position is not hedged).
Now let us look into 15 min chart for entry point. First 15 min(10.15 am) candle after closure 9.15 am hourly candle closed below trend line shown in the chart. Next 15 min(10.30 am) candle closed above trendline and closed at 20.8. Next 15 min candle open at 20.8 and low made is 20.6. So we can get entry in between 20.6 and 20.8. Followitng table summarises various entry point and RRR for trade set up for SL1 and SL2
Performance of stocks as on Apr 17, 2020 is posted below
Week closing Apr 9, 2020
|
Week closing Apr 17, 2020
|
||||||||
Stock
|
CMP
|
Tgt 1
|
Tgt 2
|
Tgt 3
|
Open
|
High
|
Low
|
Close
|
% Gain (High)
|
ITC
|
185.25
|
203
|
210
|
184.5
|
193.75
|
181.05
|
188.1
|
4.59
|
|
VEDL
|
76.8
|
92
|
96
|
77.6
|
87
|
73.65
|
84.1
|
13.28
|
|
NCC
|
20.15
|
23
|
26
|
28
|
20.3
|
28.95
|
19.65
|
28.25
|
43.67
|
RBL
|
120.85
|
134
|
140
|
120
|
135.8
|
112.3
|
128
|
12.37
|
|
SUNTV
|
338.3
|
360
|
365
|
390
|
339
|
376
|
326.55
|
367.8
|
11.14
|
CANBK
|
91.5
|
111
|
118
|
121
|
90.95
|
92
|
83.5
|
86.85
|
0.55
|
SBIN
|
187.75
|
194
|
202
|
211
|
186.8
|
198
|
180.15
|
193.25
|
5.46
|
RECLTD
|
89
|
101
|
106
|
89
|
99
|
85.6
|
95.5
|
11.24
|
|
INDIGO
|
1041.95
|
1100
|
1140
|
1160
|
1052
|
1090.85
|
983
|
1068.3
|
4.69
|
HINDPETRO
|
207.85
|
218
|
223
|
227
|
209
|
220
|
199.45
|
217.7
|
5.85
|
Hindalco
|
107.55
|
113
|
127
|
134
|
109
|
125.7
|
105.1
|
124.15
|
16.88
|
CHOLAFIN
|
171.75
|
185
|
204
|
225
|
170
|
180.8
|
145
|
176.6
|
5.27
|
BHARATFORG
|
245.55
|
277
|
288
|
299
|
250
|
286
|
229
|
283.8
|
16.47
|
SRTRANSFIN
|
675.95
|
730
|
785
|
840
|
655.95
|
817.5
|
620.2
|
802.05
|
20.94
|
Out of 14 stocks
Tgt 3 achieved:- 1
Close to Tgt 3:- 1
Tgt 2 achieved:- 2
Close to Tgt 2:- 1(Bharatforg 2 points from Tgt 2)
Tgt 1 achieved:- 2
Close to Tgt 1:- 2
Did not reach even Tgt 1 yet:- 5
Out of 14 stocks, 13 closed positive from the closing price on Apr 9 and 1 stock did not perform at all and closed negative from Apr 9 price (CANBK). Out of 5 stocks that did not reach target 1, they still achieved more than 10% gain.
But it will be important to find out how many stocks really gave good trade set up where Stop Loss (SL) was not too far from entry and Risk Reward Ratio (RRR) was good enough to justify a trade.
I will analyse a few stocks to explain the above idea. I will try to find trade set up based on an hourly and 15 min chart on/after Apr 13. Let's start with NCC that perform extraordinarily in terms of gain.
NCC:
Before we look for entry possibility based on the 15 min chart, we need to find SL for trade so that we get an entry point that fits our RRR. Minimum RRR should be 1:2, which is for the risk of Re 1, profit should be 2. Our first target price is our minimum profit potential. So let us do that calculation for NCC.
Risk Reward Calculations:
SL = 19.3 or 19.55 (I will prefer 19.3 just below low of 19.4 shown on the hourly chart)
First Target price = 23
FOR RRR = 1:2
|
|||
SL 1
|
SL 2
|
||
19.55
|
19.3
|
||
Tgt 1
|
23
|
23
|
|
Max Risk
|
1.15
|
1.23
|
(Tgt 1- SL)/3
|
Entry Point
|
20.70
|
20.53
|
(SL+Max Risk)
|
So we will take trade only if we get entry at or below 20.55 OR 20.7( Little upside is acceptable-20.6/20.75)
Position Sizing:
Another point is absolute money risk in the trade. In this case, our risk is Rs. 1.25/share. So we will have adjust position size in case of cash trade depending on our risk appetite per trade. Suppose we do not want to loose more than Rs.5000/- per trade, then max number of shares we can buy (5000/1.25) 4000 no (This does not take into account Gap down risk in case of overnight position).
In case of stock future trade this risk would very high. In case of NCC (Lot size = 9000 no). So per lot risk will be 9000*1.25 = 11250/-. (Holding position overnight will have higher risk, incase of Big gap down, if position is not hedged).
Now let us look into 15 min chart for entry point. First 15 min(10.15 am) candle after closure 9.15 am hourly candle closed below trend line shown in the chart. Next 15 min(10.30 am) candle closed above trendline and closed at 20.8. Next 15 min candle open at 20.8 and low made is 20.6. So we can get entry in between 20.6 and 20.8. Followitng table summarises various entry point and RRR for trade set up for SL1 and SL2
SL 1(19.55)
|
SL 2(19.3)
|
|||||||
Entry
|
20.8
|
20.75
|
20.7
|
20.65
|
20.8
|
20.75
|
20.7
|
20.65
|
Tgt 1
|
23
|
23
|
23
|
23
|
23
|
23
|
23
|
23
|
Profit Potential
|
2.2
|
2.25
|
2.3
|
2.35
|
2.2
|
2.25
|
2.3
|
2.35
|
Max Risk
|
1.15
|
1.15
|
1.15
|
1.15
|
1.23
|
1.23
|
1.23
|
1.23
|
Reward
|
1.91
|
1.96
|
2.00
|
2.04
|
1.78
|
1.82
|
1.86
|
1.91
|
RRR
|
1:1.91
|
1:1.96
|
1:2
|
1:2.04
|
1:1.8
|
1:1.82
|
1:1.86
|
1:1.91
|
So for SL2 only entry at 20.65 gives desired set up (1: 1.9 is approx to 1:2). For SL1 all entry points offer trade set up close to RRR 1:2.I will prefer SL2 as probability of SL1 hitting is high.
I will share similar trade set up for few other stocks in next post.
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