1750.2 +3.31 (+0.19%) Sell

HINDUNILVR shows sign of weakness as investors do cost averaging

14 min read

HINDUSTAN UNILEVER LTD. is looking better than most other alternatives on Tuesday. It grew by +0.19% to close at 1750.2. On a day when the overall market breadth was 70%, it closed higher than 68% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0036%.

[Themes containing HINDUNILVR]

Buy-and-Hold investors in HINDUNILVR experienced a maximum drawdown of -6.26% over the last three months. It grew by +13.42% during this strong up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals. The net profit from Long signals was +8.08%.


HINDUNILVR has been underperforming the NIFTY-50 index in recent time, after having outperformed till 14 Dec, 2018. Over the last 3 years and 1 month, HINDUNILVR outperformed the NIFTY-50 index on 52% days.

During the last three months HINDUNILVR delivered losses on 54% days. However, it still managed to end this period in a profit. It's best return during this period (of +4.11%) was on Monday, 26 Nov, 2018. While it's worst loss in the same period (of -2.52%) was on Thursday, 6 Dec, 2018. There was initially a bearish trend during this period which started on 25 Oct, 2018 and went on till 29 Oct, 2018. The trend delivered -1.53% losses to investors. This was followed by a bullish trend that started on 12 Dec, 2018 and ended on 14 Dec, 2018. This bullish trend delivered +3.62% to investors.

HINDUNILVR had 8 profitable and 4 loss making months over the last year. HINDUNILVR was profitable in more months than NIFTY-50 index. HINDUNILVR significantly outperformed NIFTY-50 index in Apr 2018, when it returned +11.85% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. HINDUNILVR had a longer winning streak of profitable months than NIFTY-50 index. It went up in 6 straight months (from Mar 2018 to Aug 2018) during which period it delivered +30.77%.

There is nothing wrong with changing a plan when the situation has changed.
-- Seneca

HINDUNILVR is becoming less volatile overall. In comparison, the NIFTY-50 index is seeing a fall in volatility. During the last three months, there was a significant fall in HINDUNILVR's volatility from 5 Dec, 2018 to 10 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 HINDUNILVR 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 HINDUNILVR derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.

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

Based on your interest in HINDUNILVR you may find it interesting to know that ~ITSERVICES and GILLETTE have both performed similar to HINDUNILVR and can be considered by investors as alternative investment options.

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