887.0 +19.57 (+2.21%) Sell

MINDTREE investors considering profit booking at current levels

15 min read

MINDTREE delivered stellar performance today. On a longer term basis, investors in MINDTREE LIMITED made +0.07% per day. Friday's performance of +2.21% was a significant outperformance compared to it's daily average.

[Themes containing MINDTREE]

Buy-and-Hold investors in MINDTREE experienced a maximum drawdown of -9.09% over the last three months. It gained +8.98% during this up trending period. There were no long signals during this period. However, the short signal incurred a significant loss, losing -8.98% of investors' capital.


MINDTREE has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, MINDTREE underperformed the NIFTY-50 index on 51% days.

MINDTREE was profitable on 50% days in the last three months. During this time, it delivered on average +0.16% per day. It delivered it's best daily return of +8.23%, during this period, on Wednesday, 31 Oct, 2018. There was initially a bullish trend during this period which started on 5 Nov, 2018 and went on till 12 Nov, 2018. The bullish trend returned +7.21% to investors. This was followed by a bearish trend that started on 1 Jan, 2019 and ended on 4 Jan, 2019. This bearish trend lost -5.83% of investor capital.

On monthly basis, MINDTREE delivered losses in more months over the last year, than profits. MINDTREE delivered profits less regularly than NIFTY-50 index. MINDTREE significantly outperformed NIFTY-50 index in Apr 2018, when it returned +34.33% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. MINDTREE 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 -14.83%. It is interesting to note that both MINDTREE 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

MINDTREE 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 MINDTREE's volatility from 19 Oct, 2018 to 1 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 MINDTREE has significant positive skewness in it's return distribution. This indicates that investors can expect MINDTREE to recover from drawdowns quickly. Which makes MINDTREE a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in MINDTREE derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in MINDTREE), three instruments that have performed similar to MINDTREE are SOMANYCERA, ZEEL and M&MFIN. They must all be evaluated as alternative investment options and for diversification.

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