42.5 -0.2 (-0.47%) Buy

EON investors not showing any loss of confidence as it pauses to catch its breath

13 min read

EON ELECTRIC LIMITED performed worse than the broader market on Wednesday. It delivered -0.47% to close at 42.5. It is currently trading -68% below it's 52 week high of 134.45.

[Themes containing EON]

EON is currently in a bullish trend. The previous long signal in EON has not been profitable for investors in general. If you are invested in EON at current levels please make sure that your allocation is limited and that your portfolio is well diversified.


EON has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 23 Oct, 2017 to 20 Jul, 2018. Over the last 3 years and 1 month, EON underperformed the NIFTY-50 index on 57% days.

During the last three months EON delivered losses on 69% days. However, it still managed to end this period in a profit. It's best return during this period (of +19.98%) was on Friday, 4 Jan, 2019. While it's worst loss in the same period (of -9.81%) was on Tuesday, 8 Jan, 2019. The longest stort-term trend during this period was 6 losing days, which started on 16 Jan, 2019 and ended on 23 Jan, 2019. This bearish trend lost -4.69% of investor capital.

The last 12 months saw EON's investors making profits in 6 months and incurring losses in 6 months. During the last year, EON delivered profits in more months than NIFTY-50 index. EON was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -25.0% compared to -6.42% returned by NIFTY-50 index in Sep 2018. EON and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both EON and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Happiness lies in the joy of achievement and the thrill of creative effort.
-- Franklin D. Roosevelt

EON is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in EON's volatility from 2 Nov, 2018 to 21 Dec, 2018. 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 EON has significant negative skewness in it's return distribution. This indicates that EON is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in EON you may find it interesting to know that BRITANNIA and NIFTY-GS-15YRPLUS have both shown remarkable performance and deserve to be on every investors' watchlist.

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