LUPIN investors not showing any loss of confidence as it pauses to catch its breath

LUPIN LIMITED performed worse than the broader market on Friday. It delivered -0.74% to close at 862.3. On a day when the overall market breadth was 71%, it closed higher than 17% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing LUPIN]

Buy-and-Hold investors in LUPIN experienced a maximum drawdown of -9.82% over the last three months. It delivered -2.04% during this bearish trending period. There were both Long and Short signals during this period, where the short signals were marginally more profitable than the long signals.

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LUPIN has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 9 Feb, 2016 to 10 Aug, 2018. Over the last 3 years and 1 month, LUPIN underperformed the NIFTY-50 index on 51% days.

During the last three months LUPIN delivered profits on 50% days. However, it still managed to end this period in a loss. It's best return during this period (of +3.88%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -3.77%) was on Thursday, 1 Nov, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +6.51%) started on 27 Nov, 2018 and went on till 3 Dec, 2018 while the bearish trend (which returned -10.2%) started on 4 Dec, 2018 and went on till 10 Dec, 2018.

The last 12 months saw LUPIN's investors making profits in 5 months and incurring losses in 7 months. During the last year, LUPIN and NIFTY-50 index had the same number of profitable months. LUPIN significantly outperformed NIFTY-50 index in Jun 2018, when it returned +17.44% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. LUPIN and NIFTY-50 index, both had periods of 2 consecutive losing months. It is interesting to note that both LUPIN and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"There is a huge amount of freedom that is derived from not fighting the market.

LUPIN 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 LUPIN's volatility from 19 Oct, 2018 to 14 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 LUPIN has significant positive skewness in it's return distribution. This indicates that investors can expect LUPIN to recover from drawdowns quickly. Which makes LUPIN a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in LUPIN derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in LUPIN you may find it interesting to know that ~CHEMICALS, NIFTY-GS-15YRPLUS and BAJFINANCE have all shown remarkable performance and qualify to be on every investor's watchlist.