ALKALI METALS LTD

52.85 -0.59 (-1.12%) Sell

ALKALI investors re-evaluating their investment strategy

13 min read

ALKALI METALS LTD delivered lacklustre performance on Tuesday. It delivered -1.12% to close at 52.85. On a day when the overall market breadth was 70%, it closed higher than 85% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0036%.

[Themes containing ALKALI]

ALKALI is currently in a bearish trend. The previous short signal in ALKALI has not been profitable for investors in general. If you are short on ALKALI at current levels please make sure that your allocation is limited and that your portfolio is well diversified.

Trend

ALKALI has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 13 Oct, 2016 to 22 Jan, 2019. One must note that ALKALI is currently at it's worst performance to the NIFTY-50 index which makes it a bad investment candidate. Over the last 3 years and 1 month, ALKALI underperformed the NIFTY-50 index on 56% days.

During the last three months ALKALI was mostly loss making and delivered on average -0.08% per day. It's best return during this period (of +12.55%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -3.45%) was on Monday, 10 Dec, 2018. The longest stort-term trend during this period was 5 losing days, which started on 9 Nov, 2018 and ended on 15 Nov, 2018. This bearish trend lost -7.8% of investor capital.

The last 12 months saw ALKALI's investors making profits in 5 months and incurring losses in 7 months. During the last year, ALKALI and NIFTY-50 index had the same number of profitable months. ALKALI was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Mar 2018, returned -31.61% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ALKALI had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Nov 2018 to Jan 2019) during which period it delivered -11.13%. It is interesting to note that both ALKALI and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

The stock market is a discounter of all known information.
-- Kenneth Fisher

ALKALI is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in ALKALI's volatility from 23 Oct, 2018 to 21 Jan, 2019. While there was a significant fall in the NIFTY-50 index's volatility from 31 Oct, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that ALKALI has significant negative skewness in it's return distribution. This indicates that ALKALI is very risky for short-term investment and can significantly underperform for long durations.

NIFTY-50 index has more chance of extreme outcomes than ALKALI. Therefore, NIFTY-50 must receive a lower allocation than ALKALI in your portfolio. NIFTY-50 index usually has shorter drawdown period than ALKALI.

On a general note (since you are interested in ALKALI), three mid cap instruments that deserve special mention are HATSUN, LTI and LTTS. They have all outperformed the market and must be closely watched for investment opportunities.

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