MAX FINANCIAL SERV LTD trailed the broader market on Friday. It returned -0.01% to close at 457.15. It is currently trading -18% below it's 52 week high of 559.35.
MFSL is currently in a down trend. The previous short signal in MFSL has not been profitable for investors in general. If you are short on MFSL at current levels please make sure that your allocation is limited and that your portfolio is well diversified.
MFSL returned losses on 56% days in the last three months. During this time, it delivered on average +0.29% per day. It delivered it's best daily return of +9.05%, during this period, on Thursday, 15 Nov, 2018. There was initially a bullish trend during this period which started on 27 Nov, 2018 and went on till 30 Nov, 2018. The bullish trend returned +7.72% to investors. This was followed by a bearish trend that started on 3 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -9.24% of investor capital.
On monthly basis, MFSL delivered losses in more months over the last year, than profits. MFSL delivered profits less regularly than NIFTY-50 index. MFSL significantly outperformed NIFTY-50 index in Nov 2018, when it returned +18.58% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. MFSL had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -24.64%. It is interesting to note that both MFSL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
The stock market clearly values companies that can deliver disruptive innovation.
-- Steve Blank
MFSL 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 MFSL's volatility from 19 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 MFSL has positive skewness in it's return distribution. This indicates that investors can expect MFSL to make attempts to recover from drawdowns quickly. Which makes MFSL a good candidate for momentum based trading on short-term bullish trends or counter-trends.
Investors trading in MFSL derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.
NIFTY-50 index has more chance of extreme outcomes than MFSL. Therefore, NIFTY-50 must receive a lower allocation than MFSL in your portfolio. MFSL usually has shorter drawdown period than the NIFTY-50 index.
On a general note (since you are interested in MFSL), two instruments that have been extremely volatile in recent times are TIDEWATER and SRIPIPES. Investors in these instruments should consider reducing their exposure (to TIDEWATER and SRIPIPES) and diversifying their portfolios.
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