GUJARAT ALKALIES & CHEM

525.25 +6.74 (+1.28%) Sell

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

13 min read

GUJARAT ALKALIES & CHEM outperformed on Friday. It surged by +1.28% to close at 525.25. On a day when the overall market breadth was 71%, it closed higher than 73% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing GUJALKALI]

GUJALKALI showed a strong bearish trend over the last 3 months. During this period GUJALKALI fell by -10.97% and saw a maximum drawdown of -13.82%. There were 3 short signals during this period that returned a cumulative of +0.62% to investors.

Trend

GUJALKALI has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 2 Mar, 2016 to 15 Jan, 2018. Over the last 3 years and 1 month, GUJALKALI outperformed the NIFTY-50 index on 48% days. Which indicates that on days GUJALKALI outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

GUJALKALI returned losses on 67% days in the last three months. During this time, it delivered on average -0.17% per day. It delivered it's best daily return of +5.54%, during this period, on Friday, 2 Nov, 2018. The longest stort-term trend during this period was 9 losing days, which started on 2 Jan, 2019 and ended on 14 Jan, 2019. This bearish trend lost -5.86% of investor capital.

During the last year GUJALKALI had 5 profitable months and 7 loss making months. Profitable number of months of GUJALKALI and NIFTY-50 index were the same. GUJALKALI was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Jun 2018, returned -19.01% compared to -6.42% returned by NIFTY-50 index in Sep 2018. GUJALKALI had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Jul 2018 to Sep 2018) during which period it delivered +13.79%. It is interesting to note that both GUJALKALI and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

The only way to beat an index is to invest in something other than the index. Why would you, when the only source of long-term risk and return data is the index ?
-- Hebner, Mark.

GUJALKALI 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 GUJALKALI's volatility from 5 Nov, 2018 to 18 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 GUJALKALI has significant negative skewness in it's return distribution. This indicates that GUJALKALI is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in GUJALKALI you may find it interesting to know that BAJFINANCE has shown remarkable performance and deserves to be on every investors' watchlist.

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