90.0 +1.53 (+1.69%) Sell

FEDERALBNK investors update their stop-losses higher

13 min read

FEDERAL BANK LTD delivered stellar performance on Friday. It gained +1.69% to close at 90.0. It is currently trading -20% below it's 52 week high of 112.6.

[Themes containing FEDERALBNK]

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


FEDERALBNK has been underperforming the NIFTY-50 index in recent time, after having outperformed till 18 Oct, 2017. Over the last 3 years and 1 month, FEDERALBNK outperformed the NIFTY-50 index on 51% days.

FEDERALBNK returned losses on 51% days in the last three months. During this time, it delivered on average +0.18% per day. It delivered it's best daily return of +5.26%, during this period, on Wednesday, 12 Dec, 2018. There was initially a bearish trend during this period which started on 31 Oct, 2018 and went on till 6 Nov, 2018. The trend delivered -3.7% losses to investors. This was followed by a bullish trend that started on 26 Nov, 2018 and ended on 30 Nov, 2018. This bullish trend delivered +5.64% to investors.

On monthly basis, FEDERALBNK delivered losses in more months over the last year, than profits. FEDERALBNK delivered profits less regularly than NIFTY-50 index. FEDERALBNK was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -13.87% compared to -6.42% returned by NIFTY-50 index in Sep 2018. FEDERALBNK had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered +25.68%. It is interesting to note that both FEDERALBNK and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

The secret to investing is to figure out the value of something - and then pay a lot less.
-- Joel Greenblatt

FEDERALBNK 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 FEDERALBNK's volatility from 19 Oct, 2018 to 11 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 FEDERALBNK has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

Investors trading in FEDERALBNK derivatives at this moment can consider 'Long Straddle' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in FEDERALBNK), RESPONIND has performed really well this year and deserves to be closely tracked for investment opportunities.

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