38.4 -0.4 (-1.03%) Sell

Stop-loss on the minds of DAAWAT investors as it shows weakness

13 min read

LT FOODS LIMITED underperformed on Tuesday. It delivered -1.03% to close at 38.4. It is currently trading -61% below it's 52 week high of 99.95.

[Themes containing DAAWAT]

DAAWAT is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for DAAWAT's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -6.8%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to DAAWAT.


DAAWAT has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 2 Mar, 2016 to 8 Jan, 2018. Over the last 3 years and 1 month, DAAWAT outperformed the NIFTY-50 index on 45% days. Which indicates that on days DAAWAT outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months DAAWAT was mostly loss making and delivered on average -0.07% per day. It's best return during this period (of +13.32%) was on Monday, 5 Nov, 2018. While it's worst loss in the same period (of -6.21%) was on Friday, 26 Oct, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 31 Oct, 2018 and went on till 9 Nov, 2018. This bullish trend returned +26.87% to investors.

The last 12 months saw DAAWAT's investors making profits in 5 months and incurring losses in 7 months. During the last year, DAAWAT and NIFTY-50 index had the same number of profitable months. DAAWAT was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -21.68% compared to -6.42% returned by NIFTY-50 index in Sep 2018. DAAWAT had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -43.65%. It is interesting to note that both DAAWAT and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

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DAAWAT 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 DAAWAT's volatility from 5 Nov, 2018 to 1 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 DAAWAT has significant negative skewness in it's return distribution. This indicates that DAAWAT is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in DAAWAT), TORNTPHARM is a large cap that deserves to be closely tracked for investment opportunities.

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