ESTER INDUSTRIES LTD is a falling knife that can bleed you if you catch it on Friday. It lost -1.86% to close at 34.35. It is currently trading -55% below it's 52 week high of 77.2.
ESTER showed a strong down trend over the last 3 months. During this period ESTER lost -14.12% and saw a maximum drawdown of -26.88%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ESTER till volatility reduces and a clear trend emerges.
ESTER has been underperforming the NIFTY-50 index in recent time, after having outperformed till 5 Jan, 2016. ESTER is currently at it's worst performance to the NIFTY-50 index and therefore does not make a good investment candidate. Over the last 3 years and 1 month, ESTER underperformed the NIFTY-50 index on 58% days.
During the last three months ESTER was mostly loss making and delivered on average -0.21% per day. It's best return during this period (of +8.5%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -6.44%) was on Tuesday, 20 Nov, 2018. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 2 Nov, 2018. The bullish trend returned +18.95% to investors. This was followed by a bearish trend that started on 12 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -17.99% of investor capital.
ESTER had 5 profitable and 7 loss making months over the last year. During the last year, number of profitable months of ESTER and NIFTY-50 index were the same. ESTER was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -20.87% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ESTER and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both ESTER and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
If you are standing on the platform when the train has pulled away, It's not going to back up for you. When a bull market takes off, It's not going to back up for you.
-- Don Connelly
ESTER 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 surge in ESTER's volatility from 19 Oct, 2018 to 5 Nov, 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 ESTER has significant negative skewness in it's return distribution. This indicates that ESTER is very risky for short-term investment and can significantly underperform for long durations.
ESTER has more chance of extreme outcomes than the NIFTY-50 index. Therefore, ESTER must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than ESTER.
On a general note (since you are interested in ESTER), LTTS has performed really well this year and deserves to be closely tracked for investment opportunities.
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