INDOWIND ENERGY LTD

5.85 +0.1 (+1.74%) Sell

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

15 min read

INDOWIND delivered good returns today. On a longer term basis, investors in INDOWIND ENERGY LTD made +0.15% per day. Friday's performance of +1.74% was a significant outperformance compared to it's daily average.

[Themes containing INDOWIND]

Buy-and-Hold investors in INDOWIND experienced a maximum drawdown of -25.0% over the last three months. It grew by +36.05% 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 +27.32%.

Trend

INDOWIND has been underperforming the NIFTY-50 index in recent time, after having outperformed till 8 Nov, 2017. Over the last 1 year and 8 months, INDOWIND outperformed the NIFTY-50 index on 50% days. Which indicates that on days INDOWIND 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 INDOWIND delivered losses on 52% days. However, it still managed to end this period in a profit. It's best return during this period (of +9.28%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -7.89%) was on Monday, 14 Jan, 2019. There was initially a bullish trend during this period which started on 1 Nov, 2018 and went on till 7 Nov, 2018. The bullish trend returned +34.41% to investors. This was followed by a bearish trend that started on 18 Dec, 2018 and ended on 27 Dec, 2018. This bearish trend lost -19.06% of investor capital.

INDOWIND had 4 profitable and 8 loss making months over the last year. During the last year, INDOWIND underperformed NIFTY-50 index on monthly return basis. INDOWIND significantly outperformed NIFTY-50 index in Nov 2018, when it returned +40.45% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. INDOWIND had a longer winning streak of losing months than NIFTY-50 index. It went down in 4 straight months (from Apr 2018 to Jul 2018) during which period it delivered -45.7%. It is interesting to note that both INDOWIND and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Buy not on optimism, but on arithmetic.

INDOWIND is becoming more 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 INDOWIND's volatility from 22 Oct, 2018 to 11 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 INDOWIND 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.

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

On a general note (since you are interested in INDOWIND), three instruments that have performed similar to INDOWIND are PDMJEPAPER, VSSL and SICAGEN. They must all be evaluated as alternative investment options and for diversification.

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