Stop-loss on the minds of BAJAJ-AUTO investors as it underperforms
18 Dec, 201813 min read
Share with friends 
BAJAJ AUTO LIMITED performed worse than the broader market on Tuesday. It returned -0.0% to close at 2840.9. On a day when the overall market breadth was 71%, it closed higher than 44% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.19%.
[Themes containing BAJAJ-AUTO]
BAJAJ-AUTO is currently in a up trend. The previous long signal in BAJAJ-AUTO has not been profitable for investors in general. If you are invested in BAJAJ-AUTO at current levels please make sure that your allocation is limited and that your portfolio is well diversified.
BAJAJ-AUTO has been outperforming the NIFTY-50 index in recent time. Over the last 2 years and 12 months, BAJAJ-AUTO underperformed the NIFTY-50 index on 52% days.
During the last three months BAJAJ-AUTO was mostly profitable and delivered on average +0.05% per day. It's best return during this period (of +4.61%) was on Thursday, 29 Nov, 2018. While it's worst loss in the same period (of -4.31%) was on Wednesday, 24 Oct, 2018. There was initially a bearish trend during this period which started on 15 Oct, 2018 and went on till 19 Oct, 2018. The trend delivered -4.35% losses to investors. This was followed by a bullish trend that started on 25 Oct, 2018 and ended on 9 Nov, 2018. This bullish trend delivered +8.52% to investors.
On monthly basis, BAJAJ-AUTO delivered profits and losses in equal number of months. BAJAJ-AUTO delivered profits less regularly than NIFTY-50 index. BAJAJ-AUTO was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Feb 2018, returned -9.66% compared to -6.42% returned by NIFTY-50 index in Sep 2018. BAJAJ-AUTO and NIFTY-50 index, both had periods of 2 consecutive profitable months.
Courage is being scared to death, but saddling up anyway.
-- John Wayne
BAJAJ-AUTO is becoming less 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 BAJAJ-AUTO's volatility from 21 Sep, 2018 to 20 Nov, 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 BAJAJ-AUTO has significant negative skewness in it's return distribution. This indicates that BAJAJ-AUTO is very risky for short-term investment and can significantly underperform for long durations.
Investors trading in BAJAJ-AUTO derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.
NIFTY-50 index has more chance of extreme outcomes than BAJAJ-AUTO. Therefore, NIFTY-50 must receive a lower allocation than BAJAJ-AUTO in your portfolio. NIFTY-50 index usually has shorter drawdown period than BAJAJ-AUTO.
On a general note (since you are interested in BAJAJ-AUTO), VINATIORGA is a small cap that deserves to be closely tracked for investment opportunities.
... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.
All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.
We want to empower investors with all the tools and analysis required by them to make a rational investment decision.
If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute