94.95 -1.96 (-2.06%) Sell

Want to invest in MAANALU? Avoid as it is a falling knife that can bleed you if you catch it

13 min read

MAANALU is a falling knife that can bleed you if you catch it today. On a longer term basis, investors in MAAN ALUMINIUM LIMITED made +0.33% per day. Wednesday's performance of -2.06% was a significant underperformance compared to it's daily average.

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MAANALU showed a down trend over the last 3 months. During this period MAANALU returned -3.11% and saw a maximum drawdown of -22.9%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in MAANALU till volatility reduces and a clear trend emerges.


MAANALU has been underperforming the NIFTY-50 index in recent time, after having outperformed till 15 Jan, 2018. Over the last 3 years and 1 month, MAANALU outperformed the NIFTY-50 index on 46% days. Which indicates that on days MAANALU outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

MAANALU returned losses on 53% days in the last three months. During this time, it delivered on average -0.01% per day. It delivered it's best daily return of +14.21%, during this period, on Thursday, 1 Nov, 2018. There was initially a bullish trend during this period which started on 26 Oct, 2018 and went on till 30 Oct, 2018. The bullish trend returned +6.09% to investors. This was followed by a bearish trend that started on 17 Jan, 2019 and ended on 23 Jan, 2019. This bearish trend lost -6.76% of investor capital.

On monthly basis, MAANALU delivered losses in more months over the last year, than profits. MAANALU delivered profits in more months than NIFTY-50 index. MAANALU was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Mar 2018, returned -28.19% compared to -6.42% returned by NIFTY-50 index in Sep 2018. MAANALU and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both MAANALU and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

If you are standing on the platform when the train has pulled away, It's not going to back up for you. When a bull market takes off, It's not going to back up for you.
-- Don Connelly

MAANALU 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 MAANALU's volatility from 25 Oct, 2018 to 16 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 MAANALU has significant negative skewness in it's return distribution. This indicates that MAANALU is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in MAANALU), three instruments that deserve special mention are ~CHEMICALS, NIFTY-GS-15YRPLUS and BRITANNIA. They have all outperformed the market and must be closely watched for investment opportunities.

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