6.2 -0.1 (-1.59%) Sell

GAL investors incur serious losses

13 min read

GYSCOAL ALLOYS LTD is a falling knife that can bleed you if you catch it on Friday. It delivered -1.59% to close at 6.2. It is currently trading -42% below it's 52 week high of 10.8.

[Themes containing GAL]

Buy-and-Hold investors in GAL experienced a maximum drawdown of -32.61% over the last three months. It delivered -22.98% during this strong bearish trending period. There were no long signals during this period, where the short signal generated good profits of +22.98% for investors.


GAL has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 6 Jan, 2016 to 13 Dec, 2016. Over the last 3 years and 1 month, GAL outperformed the NIFTY-50 index on 47% days. Which indicates that on days GAL outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months GAL was mostly loss making and delivered on average -0.38% per day. It's best return during this period (of +5.22%) was on Tuesday, 11 Dec, 2018. While it's worst loss in the same period (of -4.68%) was on Tuesday, 6 Nov, 2018. The longest stort-term trend during this period was 9 losing days, which started on 1 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -24.11% of investor capital.

The last 12 months saw GAL's investors making profits in 4 months and incurring losses in 8 months. GAL was less consistent in delivering monthly returs than NIFTY-50 index. GAL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Nov 2018, returned -21.74% compared to -6.42% returned by NIFTY-50 index in Sep 2018. GAL and NIFTY-50 index, both had periods of 3 consecutive profitable months. It is interesting to note that both GAL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Finance is wholly different from the rest the economy.

GAL 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 GAL's volatility from 22 Oct, 2018 to 30 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 GAL 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.

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

Based on your interest in GAL you may find it interesting to know that LTI, MERCK and NIITTECH have all shown remarkable performance this year and deserve to be on every investor's watchlist.

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