87.95 -1.72 (-1.95%) Buy

Search for alternative investments is on for NCC investors as it underperforms

13 min read

NCC LIMITED significantly underperformed on Friday. It delivered -1.95% to close at 87.95. On a day when the overall market breadth was 71%, it closed higher than 56% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing NCC]

Buy-and-Hold investors in NCC experienced a maximum drawdown of -13.63% over the last three months. It surged by +33.06% during this strong bullish trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.


NCC has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 9 Jan, 2018 to 1 Oct, 2018. Over the last 3 years and 1 month, NCC underperformed the NIFTY-50 index on 52% days.

NCC was profitable on 55% days in the last three months. During this time, it delivered on average +0.49% per day. It delivered it's best daily return of +8.9%, during this period, on Monday, 29 Oct, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 26 Oct, 2018 and went on till 2 Nov, 2018. This bullish trend returned +19.85% to investors.

The last 12 months saw NCC's investors making profits in 6 months and incurring losses in 6 months. During the last year, NCC delivered profits in more months than NIFTY-50 index. NCC was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -26.0% compared to -6.42% returned by NIFTY-50 index in Sep 2018. NCC had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered +21.34%. It is interesting to note that both NCC and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Try not to become a man of success. Rather become a man of value.
-- Albert Einstein

NCC 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 NCC'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 NCC has positive skewness in it's return distribution. This indicates that investors can expect NCC to make attempts to recover from drawdowns quickly. Which makes NCC a good candidate for momentum based trading on short-term bullish trends or counter-trends.

Investors trading in NCC 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 NCC. Therefore, NIFTY-50 must receive a lower allocation than NCC in your portfolio. NIFTY-50 index usually has shorter drawdown period than NCC.

Based on your interest in NCC you may find it interesting to know that RESPONIND, ASTRAZEN and IGARASHI are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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