GUJ IND POW CO. LTD

77.9 +0.55 (+0.71%) Sell

GIPCL does a dead cat bounce, it's still too early to buy into it

13 min read

GUJ IND POW CO. LTD outperformed the broader market today. It increased by +0.71% to close at 77.9. It's recent 5 day performance has been +0.45%, +0.06%, -0.77%, -0.83% and +0.84%.

[Themes containing GIPCL]

GIPCL showed a strong bullish trend over the last 3 months. During this period GIPCL increased by +13.39% and saw a maximum drawdown of -9.52%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in GIPCL till volatility reduces and a clear trend emerges.

Trend

GIPCL has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 10 Oct, 2017 to 1 Oct, 2018. Over the last 3 years and 1 month, GIPCL underperformed the NIFTY-50 index on 53% days.

During the last three months GIPCL was mostly profitable and delivered on average +0.22% per day. It's best return during this period (of +6.88%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -7.46%) was on Wednesday, 31 Oct, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +13.6%) started on 23 Oct, 2018 and went on till 29 Oct, 2018 while the bearish trend (which returned -8.62%) started on 4 Dec, 2018 and went on till 10 Dec, 2018.

The last 12 months saw GIPCL's investors making profits in 3 months and incurring losses in 9 months. GIPCL was less consistent in delivering monthly returs than NIFTY-50 index. GIPCL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -16.68% compared to -6.42% returned by NIFTY-50 index in Sep 2018. GIPCL had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -20.6%. It is interesting to note that both GIPCL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Watch your finances like a hawk.

GIPCL 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 GIPCL's volatility from 1 Nov, 2018 to 21 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 GIPCL has significant negative skewness in it's return distribution. This indicates that GIPCL is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in GIPCL), two large cap instruments that deserve special mention are BAJFINANCE and TORNTPHARM. They have significantly outperformed the overall market.

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