GUJ STATE FERT & CHEM LTD

107.85 -3.11 (-2.88%) Sell

GSFC is a falling knife, continues to bleed every investor trying to catch it

13 min read

GSFC is a falling knife that can bleed you if you catch it today. On a longer term basis, investors in GUJ STATE FERT & CHEM LTD made +0.08% per day. Friday's performance of -2.88% was a underperformance compared to it's daily average.

[Themes containing GSFC]

GSFC showed a strong bullish trend over the last 3 months. During this period GSFC surged by +16.97% and saw a maximum drawdown of -11.67%. There were 2 long signals during this period that returned a cumulative of +2.85% to investors.

Trend

GSFC has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 3 Aug, 2016 to 6 Nov, 2017. Over the last 3 years and 1 month, GSFC outperformed the NIFTY-50 index on 47% days. Which indicates that on days GSFC outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

GSFC was profitable on 52% days in the last three months. During this time, it delivered on average +0.27% per day. It delivered it's best daily return of +6.56%, during this period, on Friday, 2 Nov, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 26 Oct, 2018 and went on till 2 Nov, 2018. This bullish trend returned +22.26% to investors.

The last 12 months saw GSFC's investors making profits in 6 months and incurring losses in 6 months. During the last year, GSFC delivered profits in more months than NIFTY-50 index. GSFC was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -20.09% compared to -6.42% returned by NIFTY-50 index in Sep 2018. GSFC 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 +21.19%. It is interesting to note that both GSFC and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Happiness lies in the joy of achievement and the thrill of creative effort.
-- Franklin D. Roosevelt

GSFC 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 GSFC's volatility from 2 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 GSFC has significant negative skewness in it's return distribution. This indicates that GSFC is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in GSFC derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in GSFC you may find it interesting to know that ASTRAZEN, NIITTECH and IGARASHI are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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