INDIAN METALS & FERRO

232.5 +1.16 (+0.5%) Sell

IMFA shows sign of weakness as investors do cost averaging

13 min read

INDIAN METALS & FERRO performed better than the broader market today. It returned +0.5% to close at 232.5. It's recent 5 day performance has been -1.15%, -2.15%, +0.4%, +0.02% and +1.49%.

[Themes containing IMFA]

IMFA is currently in a down trend. Over the last three months 3 bearish signals have generated a profit of +2.25% for investors.

Trend

IMFA has been underperforming the NIFTY-50 index in recent time, after having outperformed till 27 Mar, 2017. Over the last 3 years and 1 month, IMFA outperformed the NIFTY-50 index on 44% days. Which indicates that on days IMFA outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months IMFA was mostly loss making and delivered on average -0.24% per day. It's best return during this period (of +4.15%) was on Wednesday, 12 Dec, 2018. While it's worst loss in the same period (of -4.21%) was on Monday, 10 Dec, 2018. There was initially a bearish trend during this period which started on 15 Nov, 2018 and went on till 30 Nov, 2018. The trend delivered -9.04% losses to investors. This was followed by a bullish trend that started on 11 Dec, 2018 and ended on 14 Dec, 2018. This bullish trend delivered +9.46% to investors.

On monthly basis, IMFA delivered losses in more months over the last year, than profits. IMFA delivered profits less regularly than NIFTY-50 index. IMFA was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -29.06% compared to -6.42% returned by NIFTY-50 index in Sep 2018. IMFA had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Sep 2018 to Nov 2018) during which period it delivered -23.75%. It is interesting to note that both IMFA and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

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IMFA 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 IMFA's volatility from 23 Oct, 2018 to 13 Nov, 2018. 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 IMFA has significant negative skewness in it's return distribution. This indicates that IMFA is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in IMFA you may find it interesting to know that INFY and BRITANNIA are both large caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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