ASIANPAINT shows sign of weakness as investors do cost averaging

ASIANPAINT performed better than the broader market today. On a longer term basis, investors in ASIAN PAINTS LIMITED made +0.09% per day. Tuesday's performance of +1.49% was a significant outperformance compared to it's daily average.

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Buy-and-Hold investors in ASIANPAINT experienced a maximum drawdown of -12.75% over the last three months. It returned +4.98% during this up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.

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ASIANPAINT has been outperforming the NIFTY-50 index in recent time. Over the last 2 years and 12 months, ASIANPAINT outperformed the NIFTY-50 index on 51% days.

During the last three months ASIANPAINT delivered losses on 55% days. However, it still managed to end this period in a profit. It's best return during this period (of +4.26%) was on Wednesday, 24 Oct, 2018. While it's worst loss in the same period (of -5.16%) was on Tuesday, 23 Oct, 2018. There was initially a bearish trend during this period which started on 1 Oct, 2018 and went on till 5 Oct, 2018. The trend delivered -6.63% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 31 Oct, 2018. This bullish trend delivered +3.35% to investors.

On monthly basis, ASIANPAINT delivered profits and losses in equal number of months. ASIANPAINT delivered profits less regularly than NIFTY-50 index. ASIANPAINT significantly outperformed NIFTY-50 index in Jul 2018, when it returned +12.25% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. ASIANPAINT had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Mar 2018 to May 2018) during which period it delivered +13.36%. It is interesting to note that both ASIANPAINT and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Success is walking from failure to failure with no loss of enthusiasm.
-- Winston Churchill

ASIANPAINT is becoming more volatile overall. In comparison, the NIFTY-50 index is seeing a fall in volatility. During the last three months, there was a significant fall in ASIANPAINT's volatility from 21 Sep, 2018 to 5 Dec, 2018. While there was a significant fall in the NIFTY-50 index's volatility from 21 Sep, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that ASIANPAINT has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

Investors trading in ASIANPAINT derivatives at this moment can consider 'Long Straddle' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in ASIANPAINT), two instruments that have been extremely volatile in recent times are IEX and ~HOMEAPPLIANCES. Investors in these instruments should consider reducing their exposure (to IEX and ~HOMEAPPLIANCES) and diversifying their portfolios.