KITEX GARMENTS LTD delivered lacklustre performance on Friday. It returned -0.18% to close at 108.7. On a day when the overall market breadth was 71%, it closed higher than 10% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
KITEX is currently in a down trend. Over the last three months trading short signals has not been a profitable strategy for KITEX's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -4.27%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to KITEX.
During the last three months KITEX was mostly loss making and delivered on average -0.06% per day. It's best return during this period (of +4.86%) was on Wednesday, 12 Dec, 2018. While it's worst loss in the same period (of -3.28%) was on Friday, 9 Nov, 2018. There was initially a bullish trend during this period which started on 31 Oct, 2018 and went on till 2 Nov, 2018. The bullish trend returned +7.27% to investors. This was followed by a bearish trend that started on 11 Jan, 2019 and ended on 18 Jan, 2019. This bearish trend lost -1.55% of investor capital.
On monthly basis, KITEX delivered losses in more months over the last year, than profits. KITEX delivered profits less regularly than NIFTY-50 index. KITEX was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -30.65% compared to -6.42% returned by NIFTY-50 index in Sep 2018. KITEX had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -64.96%. It is interesting to note that both KITEX and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
"The financial markets generally are unpredictable. So that one has to have different scenarios... The idea that you can actually predict what's going to happen contradicts my way of looking at the market.
KITEX 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 KITEX's volatility from 22 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 KITEX has positive skewness in it's return distribution. This indicates that investors can expect KITEX to make attempts to recover from drawdowns quickly. Which makes KITEX a good candidate for momentum based trading on short-term bullish trends or counter-trends.
NIFTY-50 index has more chance of extreme outcomes than KITEX. Therefore, NIFTY-50 must receive a lower allocation than KITEX in your portfolio. NIFTY-50 index usually has shorter drawdown period than KITEX.
On a general note (since you are interested in KITEX), three large cap instruments that deserve special mention are TORNTPHARM, BRITANNIA and INFY. They have all outperformed the market and must be closely watched for investment opportunities.
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