Stop-loss on the minds of KAKATCEM investors as it shows weakness
18 Jan, 201913 min read
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KAKATIYA CEM SUGAR &IND L ranked worse than it's peers today. It fell by -0.84% to close at 193.95. During the last week it fell by -1.17% and saw a maximum drawdown of -1.82% before bouncing back.
KAKATCEM is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for KAKATCEM's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned +1.28%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to KAKATCEM.
KAKATCEM has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 11 Feb, 2016 to 19 May, 2016. Over the last 3 years and 1 month, KAKATCEM underperformed the NIFTY-50 index on 55% days.
During the last three months KAKATCEM delivered losses on 65% days. However, it still managed to end this period in a profit. It's best return during this period (of +9.35%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -2.69%) was on Tuesday, 23 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -5.95% of investor capital.
During the last year KAKATCEM had 3 profitable months and 9 loss making months. KAKATCEM returned profits in fewer months than NIFTY-50 index. KAKATCEM was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Feb 2018, returned -19.97% compared to -6.42% returned by NIFTY-50 index in Sep 2018. KAKATCEM had a longer winning streak of losing months than NIFTY-50 index. It went down in 4 straight months (from Aug 2018 to Nov 2018) during which period it delivered -25.83%. It is interesting to note that both KAKATCEM and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
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KAKATCEM 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 fall in KAKATCEM's volatility from 29 Oct, 2018 to 18 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 KAKATCEM has significant negative skewness in it's return distribution. This indicates that KAKATCEM is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than KAKATCEM. Therefore, NIFTY-50 must receive a lower allocation than KAKATCEM in your portfolio. NIFTY-50 index usually has shorter drawdown period than KAKATCEM.
Based on your interest in KAKATCEM you may find it interesting to know that IGARASHI is a small cap that has shown remarkable performance and deserves to be on every investors' watchlist.
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