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  • Writer's pictureLester Davids

Systematic Insights: Timely Signals Via The Tactical Trading Guide

Updated: Jan 31

As proof, all examples include the original (time-stamped) reading.


Tickers Discussed: MTN, MNP, TBS, SBK, DSY, TKG, MTM, HAR, GFI, IMP


Technology and Proprietary Insights has helped to develop automated tools and strategies that are used to identify potential trading opportunities as well as highlight potentially significant technical developments across various time frames. The Tactical Trading Guide is an systematic tool which provides analysis on an instrument across 3 trading time frames: short , medium and long (long term).


The Trading Time Frames are defined as follows:


Short term: approximately 1 to 10 trading days

Medium Term: approximately 2 to 4 weeks

Long Term: approximately 5 to 8 weeks


The tool helps to determine and shed light on the some of the following:


  • Whether the reward-to-risk is attractive for a buy/long position?

  • Whether a share is weak or if aggressive buying is underway

  • Whether a trader can look to buy a pullback into a key moving average (continuation trade)

  • Whether a share needs to break a range for a new trend to be determined (bullish or bearish)

  • Whether a traders needs to monitor for a change of character that could lead to a bullish or bearish reversal

  • Whether a share could start a consolidation phase

  • Whether the upward momentum is slowing (if it's in a bullish phase)

  • Whether buyers can look to 'phase in' to a position (if it's in a bearish phase)

  • Whether a share lacks directional bias

You may be asking: 'Why are we looking back?'


My Answer: "To determine whether the system provided traders with the 'RIGHT SIGNAL' at the 'RIGHT TIME'.


No model or system of automation in the financial markets, anywhere in the world works 100% of the time, and neither does this one. It may however help to improve an existing process for a market participants who require timely, non-biased insights.

Below, I provide recent ACTUAL and REAL-TIME examples of the signals, which are time-stamped as proof.


MTN Group (MTN). The share has de-rated sharply since mid-December where the previous support became resistance and where the Tactical Trading Guide suggested that the "buy/long reward-to-risk was unattractive". Both the chart and the time-stamped reading is shown below:




Mondi Plc (MNP). On 19 October, the group released it's Q3 update which saw the share drop by 6%. By the end of the day on 19 October, the Tactical Trading Guide for the SHORT TERM stated the following: "Aggressive selling however the buy/long reward-to-risk may be attractive". The following day (20 October), the end of day reading was as follows: "Reward-to-risk becoming attractive for a buy/long position". Both time-stamped readings are shown below, followed by the chart.





 

Tiger Brands (TBS): The most recent swing low of R136 (close of R142) lead to a SHORT TERM buy signal being generated (1 to 10 days) on 04 October, followed by a LONG TERM (5 to 8 weeks) continuation signal on 20 October. Both time-stamped readings are shown below, followed by the chart.






 

Standard Bank (SBK): The ex-dividend decline was followed by further price weakness which generated a signal that suggested the potential for a small rebound. The bullish reversal unfolded immediately with the price having since rallied from R175 to R200. The time-stamped reading is shown below, followed by the chart.




 

Discovery Holdings (DSY): The most recent high for the share was on 28 July at 16042c. The end of day readings for the share for all three time frames suggested that the 'buy/long side' reward-to-risk' was unattractive and that a pullback was highly likely. The time-stamped SHORT, MEDIUM and LONG TERM readings are shown below, followed by the chart highlighting 28 July.





Discovery Holdings (DSY): Sticking with DSY, at the most recent swing low generated an end-of-day buy/signal which has since seen the a bullish reversal and rally from a low of R127 to a high of R142. The time-stamped reading is shown below, followed by the chart.




 

Momentum Metropolitan (MTM)


As per the tactical trading guide, the SHORT TERM reading for this day was as follows: "Would not enter buy/long at current levels. The reward-to-risk is unattractive". The timestamped reading (as proof) is shown below.




As per the tactical trading guide, the MEDIUM TERM reading for this day was as follows: "Aggressive buying but overbought on lower time frame. Expect a consolidation or minor retracement". The timestamped reading (as proof) is shown below, followed by the chart which reflects the downside follow-through.




 

Telkom (TKG) generated a buy/long signal on 30 October just above R20 which was subsequently followed by a multi-week rally to R29. The timestamped reading (as proof) is shown below, followed by the updated chart.




Harmony Gold (HAR). Both of the two sharp declines generated buy/long signals (17 August & 02 October). The timestamped readings (as proof) is shown below, followed by the updated chart which reflects the level at which the signal was generated.


Buy Signal 17 August




Buy Signal 02 October




Gold Fields (GFI). This one is interesting. Readers of my research will recall the alert to the bull flag breakout (continuation trade) which saw upside follow-through. The share then traded in overbought territory before retracing. The pullback was into the 21-day EMA which was the level at which the Tactical Trading Guide generated a re-entry.




GFI Original Alert To Bull Flag (Manual Review) - Wednesday 22 November at R251.




Impala Platinum (IMP) generated a triple buy signal on Wednesday (Short, Medium and Long Term). The share rallied by 13% on Thursday and is higher by a further +6% on Monday.

(Friday was a public holiday). See the time-stamped readings below:





IMP published via the Tactical Trading Guide as of Wednesday's close:




The Tactical Trading Guide is published daily.


Lester Davids

Analyst: Unum Capital


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