Profit booking on the minds of DIVISLAB investors as it manages to marginally outperform broader market
18 Jan, 201913 min read
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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%.
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.
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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