111.49 +0.06 (+0.05%) Buy

Don't go profit booking on KOTAKNIFTY now, it delivered a decent return

13 min read

KOTAK NIFTY ETF managed to marginally outperform the broader market on Friday. It gained +0.05% to close at 111.49. It is currently trading +9% above it's 52 week low of 101.45 and is down only -7% from it's 52 week high.

[Themes containing KOTAKNIFTY]

KOTAKNIFTY showed a up trend over the last 3 months. During this period KOTAKNIFTY gained +5.92% . There were 2 long signals during this period that returned a cumulative of +0.12% to investors.


KOTAKNIFTY has been underperforming the NIFTY-50 index in recent time, after having outperformed till 20 Jul, 2017. Over the last 3 years and 1 month, KOTAKNIFTY underperformed the NIFTY-50 index on 46% days. Which indicates that on days KOTAKNIFTY underperforms the NIFTY-50 index, it's performance is marginally worse than on the days it outperforms the NIFTY-50 index.

KOTAKNIFTY was profitable on 61% days in the last three months. During this time, it delivered on average +0.09% per day. It delivered it's worst daily return of -1.72%, during this period, on Thursday, 6 Dec, 2018. There was initially a bearish trend during this period which started on 20 Nov, 2018 and went on till 22 Nov, 2018. The trend delivered -1.84% losses to investors. This was followed by a bullish trend that started on 26 Nov, 2018 and ended on 4 Dec, 2018. This bullish trend delivered +3.26% to investors.

KOTAKNIFTY had 7 profitable and 5 loss making months over the last year. KOTAKNIFTY was profitable in more months than NIFTY-50 index. KOTAKNIFTY delivered +6.27% during it's best month (Jul 2018), which was lower than +6.56% delivered by NIFTY-50 index during it's best month - Jul 2018. KOTAKNIFTY had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Jun 2018 to Aug 2018) during which period it delivered +10.09%. It is interesting to note that both KOTAKNIFTY and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Everything is always feasible if you run a corporate finance exercise: you can always try to come out with a justification on how things could work. But the real issue is to say how do you translate that into practice.

KOTAKNIFTY 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 KOTAKNIFTY's volatility from 11 Dec, 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 KOTAKNIFTY has significant positive skewness in it's return distribution. This indicates that investors can expect KOTAKNIFTY to recover from drawdowns quickly. Which makes KOTAKNIFTY a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in KOTAKNIFTY), VINATIORGA is a small cap that deserves to be closely tracked for investment opportunities.

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