164.25 -0.25 (-0.15%) Sell

IEX investors looking to cut their losses short

13 min read

INDIAN ENERGY EXC LTD showed weakness today. It fell by -0.15% to close at 164.25. It's recent 5 day performance has been +0.52%, +4.3%, -0.41%, +1.06% and +0.55%.

IEX is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for IEX's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -5.16%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to IEX.


IEX has been outperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 27 Feb, 2018 to 17 Oct, 2018. Over the last 1 year and 2 months, IEX underperformed the NIFTY-50 index on 52% days.

IEX returned losses on 54% days in the last three months. During this time, it delivered on average +13.48% per day. It delivered it's best daily return of +901.6%, during this period, on Wednesday, 17 Oct, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +903.11%) started on 12 Oct, 2018 and went on till 17 Oct, 2018 while the bearish trend (which returned -5.3%) started on 3 Dec, 2018 and went on till 6 Dec, 2018.

During the last year IEX had 6 profitable months and 6 loss making months. Profitable number of months of IEX and NIFTY-50 index were the same. IEX significantly outperformed NIFTY-50 index in Mar 2018, when it returned +10.01% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. IEX and NIFTY-50 index, both had periods of 2 consecutive profitable months.

The speed of your success is limited only by your dedication and what you're willing to sacrifice.
-- Nathan W. Morris

IEX 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 IEX's volatility from 17 Oct, 2018 to 30 Oct, 2018. While there was a significant fall in the NIFTY-50 index's volatility from 21 Sep, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that IEX has significant negative skewness in it's return distribution. This indicates that IEX is very risky for short-term investment and can significantly underperform for long durations.

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

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