FUTURE ENTERPRISES LTD underperformed broader market today. It fell by -1.14% to close at 34.8. It's recent 5 day performance has been -1.81%, -2.45%, -1.21%, +1.36% and -0.68%.
FEL showed a strong bearish trend over the last 3 months. During this period FEL fell by -16.65% and saw a maximum drawdown of -21.09%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in FEL till volatility reduces and a clear trend emerges.
FEL has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 4 May, 2016 to 21 Aug, 2018. Over the last 3 years and 1 month, FEL underperformed the NIFTY-50 index on 51% days.
During the last three months FEL was mostly loss making and delivered on average -0.27% per day. It's best return during this period (of +4.87%) was on Wednesday, 12 Dec, 2018. While it's worst loss in the same period (of -7.65%) was on Thursday, 27 Dec, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +7.36%) started on 13 Nov, 2018 and went on till 16 Nov, 2018 while the bearish trend (which returned -2.64%) started on 17 Dec, 2018 and went on till 20 Dec, 2018.
During the last year FEL had 6 profitable months and 6 loss making months. FEL returned profits in more months than NIFTY-50 index. FEL significantly outperformed NIFTY-50 index in Aug 2018, when it returned +26.78% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. FEL and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both FEL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
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FEL is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in FEL's volatility from 29 Nov, 2018 to 17 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 FEL has positive skewness in it's return distribution. This indicates that investors can expect FEL to make attempts to recover from drawdowns quickly. Which makes FEL a good candidate for momentum based trading on short-term bullish trends or counter-trends.
NIFTY-50 index has more chance of extreme outcomes than FEL. Therefore, NIFTY-50 must receive a lower allocation than FEL in your portfolio. FEL usually has shorter drawdown period than the NIFTY-50 index.
On a general note (since you are interested in FEL), TORNTPHARM is a large cap that deserves to be closely tracked for investment opportunities.
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