DIVI'S LABORATORIES LTD

1509.15 +3.81 (+0.25%) Buy

Profit booking on the minds of DIVISLAB investors as it manages to marginally outperform broader market

13 min read

DIVI'S LABORATORIES LTD managed to marginally outperform the broader market on Friday. It gained +0.25% to close at 1509.15. On a day when the overall market breadth was 71%, it closed higher than 64% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing DIVISLAB]

DIVISLAB is currently in a up trend. The current bullish signal has generated a profit of +17.42% for DIVISLAB's investors in the last three months.

Trend

DIVISLAB has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, DIVISLAB underperformed the NIFTY-50 index on 51% days.

DIVISLAB returned losses on 51% days in the last three months. During this time, it delivered on average +0.28% per day. It delivered it's best daily return of +14.68%, during this period, on Monday, 29 Oct, 2018. There was initially a bullish trend during this period which started on 25 Oct, 2018 and went on till 30 Oct, 2018. The bullish trend returned +19.04% to investors. This was followed by a bearish trend that started on 28 Nov, 2018 and ended on 30 Nov, 2018. This bearish trend lost -5.6% of investor capital.

DIVISLAB had 8 profitable and 4 loss making months over the last year. DIVISLAB was profitable in more months than NIFTY-50 index. DIVISLAB significantly outperformed NIFTY-50 index in Aug 2018, when it returned +14.61% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. DIVISLAB had a longer winning streak of profitable months than NIFTY-50 index. It went up in 4 straight months (from Jul 2018 to Oct 2018) during which period it delivered +37.01%. It is interesting to note that both DIVISLAB and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Some people dream of success, while other people get up every morning and make it happen.
-- Wayne Huizenga

DIVISLAB 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 DIVISLAB's volatility from 29 Oct, 2018 to 16 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 DIVISLAB has significant positive skewness in it's return distribution. This indicates that investors can expect DIVISLAB to recover from drawdowns quickly. Which makes DIVISLAB a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in DIVISLAB 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 DIVISLAB. Therefore, NIFTY-50 must receive a lower allocation than DIVISLAB in your portfolio. DIVISLAB usually has shorter drawdown period than the NIFTY-50 index.

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

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