CUMMINS INDIA LTD

844.35 +2.61 (+0.31%) Buy

CUMMINSIND continues it's uptrend, although on a weaker note

13 min read

CUMMINS INDIA LTD managed to outperform the broader market today. It surged by +0.31% to close at 844.35. During the last week it delivered -1.21% and saw a maximum drawdown of -4.1% before bouncing back.

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CUMMINSIND is currently in a bullish trend. Over the last three months 2 bullish signals in CUMMINSIND have generated a profit of +11.81% for investors.

Trend

CUMMINSIND has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 7 Jan, 2016 to 9 Aug, 2018. Over the last 3 years and 1 month, CUMMINSIND underperformed the NIFTY-50 index on 51% days.

CUMMINSIND was profitable on 53% days in the last three months. During this time, it delivered on average +0.33% per day. It delivered it's best daily return of +10.92%, during this period, on Wednesday, 31 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 31 Dec, 2018 and ended on 4 Jan, 2019. This bearish trend lost -3.27% of investor capital.

The last 12 months saw CUMMINSIND's investors making profits in 6 months and incurring losses in 6 months. During the last year, CUMMINSIND delivered profits in more months than NIFTY-50 index. CUMMINSIND significantly outperformed NIFTY-50 index in Aug 2018, when it returned +15.77% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. CUMMINSIND had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered +24.97%. It is interesting to note that both CUMMINSIND and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Once my ears were open to hearing mentions of 'Shark Tank', I was surprised by how many people in our world, even in our industry, tech and finance, loved the show.

CUMMINSIND 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 CUMMINSIND's volatility from 23 Oct, 2018 to 10 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 CUMMINSIND has significant negative skewness in it's return distribution. This indicates that CUMMINSIND is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in CUMMINSIND derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in CUMMINSIND you may find it interesting to know that CUB, LTTS and RESPONIND have all shown remarkable performance this year and deserve to be on every investor's watchlist.

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