FOSECO INDIA LTD

1566.3 -63.47 (-4.05%) Buy

Stop-loss on the minds of FOSECOIND investors as it underperforms

13 min read

FOSECO INDIA LTD significantly underperformed on Tuesday. It lost -4.05% to close at 1566.3. On a day when the overall market breadth was 70%, it closed higher than 71% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0036%.

[Themes containing FOSECOIND]

Buy-and-Hold investors in FOSECOIND experienced a maximum drawdown of -8.93% over the last three months. It grew by +21.18% during this strong up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.

Trend

FOSECOIND has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, FOSECOIND underperformed the NIFTY-50 index on 53% days.

During the last three months FOSECOIND was mostly profitable and delivered on average +0.34% per day. It's best return during this period (of +20.0%) was on Tuesday, 15 Jan, 2019. While it's worst loss in the same period (of -4.05%) was on Tuesday, 22 Jan, 2019. There was initially a bullish trend during this period which started on 16 Nov, 2018 and went on till 22 Nov, 2018. The bullish trend returned +2.8% to investors. This was followed by a bearish trend that started on 1 Jan, 2019 and ended on 4 Jan, 2019. This bearish trend lost -3.56% of investor capital.

FOSECOIND had 6 profitable and 6 loss making months over the last year. FOSECOIND was profitable in more months than NIFTY-50 index. FOSECOIND significantly outperformed NIFTY-50 index in Aug 2018, when it returned +15.39% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. FOSECOIND had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Nov 2018 to Jan 2019) during which period it delivered +18.97%. It is interesting to note that both FOSECOIND and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"There is a huge amount of freedom that is derived from not fighting the market.

FOSECOIND is becoming more 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 FOSECOIND's volatility from 4 Jan, 2019 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 FOSECOIND has significant negative skewness in it's return distribution. This indicates that FOSECOIND is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in FOSECOIND you may find it interesting to know that NIFTY50-DIV-POINT is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to NIFTY50-DIV-POINT or sufficiently diversifying your portfolio.

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