HDFC BANK LTD managed to outperform the broader market on Monday. It surged by +0.48% to close at 2013.9. It is currently trading +12% above it's 52 week low of 1787.25 and is down only -8% from it's 52 week high.
HDFCBANK showed a bearish trend over the last 3 months. During this period HDFCBANK delivered -3.93% and saw a maximum drawdown of -8.8%. There was a short signal during this period which returned +4.38%.
HDFCBANK has been outperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 25 Feb, 2016 to 19 Jul, 2018. Over the last 2 years and 11 months, HDFCBANK outperformed the NIFTY-50 index on 51% days.
HDFCBANK returned losses on 54% days in the last three months. During this time, it delivered on average -0.06% per day. It delivered it's worst daily return of -3.61%, during this period, on Thursday, 4 Oct, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +5.58%) started on 25 Sep, 2018 and went on till 1 Oct, 2018 while the bearish trend (which returned -4.1%) started on 25 Oct, 2018 and went on till 31 Oct, 2018.
The last 12 months saw HDFCBANK's investors making profits in 7 months and incurring losses in 5 months. During the last year, HDFCBANK delivered profits in more months than NIFTY-50 index. HDFCBANK significantly outperformed NIFTY-50 index in May 2018, when it returned +10.78% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. HDFCBANK had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Mar 2018 to May 2018) during which period it delivered +11.56%. It is interesting to note that both HDFCBANK and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.
-- William A. Feather
HDFCBANK 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 surge in HDFCBANK's volatility from 3 Sep, 2018 to 5 Oct, 2018. While there was a significant surge in the NIFTY-50 index's volatility from 21 Aug, 2018 to 8 Oct, 2018.
Advanced/professional short-term investors should note that HDFCBANK 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.
Investors trading in HDFCBANK derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.
HDFCBANK has more chance of extreme outcomes than the NIFTY-50 index. Therefore, HDFCBANK must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than HDFCBANK.
Based on your interest in HDFCBANK you may find it interesting to know that TIDEWATER, IGARASHI and HATSUN are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.
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