Stop-loss on the minds of NLCINDIA investors as it underperforms broader market

NLCINDIA performed worse than the broader market today. On a longer term basis, investors in NLC INDIA LIMITED made +0.03% per day. Friday's performance of -0.07% was a significant underperformance compared to it's daily average.

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Buy-and-Hold investors in NLCINDIA experienced a maximum drawdown of -20.55% over the last three months. It lost -19.6% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +11.39%.

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NLCINDIA has been underperforming the NIFTY-50 index in recent time, after having outperformed till 23 Mar, 2017. Over the last 3 years and 1 month, NLCINDIA underperformed the NIFTY-50 index on 55% days.

During the last three months NLCINDIA was mostly loss making and delivered on average -0.32% per day. It's best return during this period (of +4.95%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -7.9%) was on Monday, 10 Dec, 2018. There was initially a bearish trend during this period which started on 5 Dec, 2018 and went on till 11 Dec, 2018. The trend delivered -16.79% losses to investors. This was followed by a bullish trend that started on 14 Jan, 2019 and ended on 16 Jan, 2019. This bullish trend delivered +1.19% to investors.

NLCINDIA had 2 profitable and 10 loss making months over the last year. During the last year, NLCINDIA underperformed NIFTY-50 index on monthly return basis. NLCINDIA significantly outperformed NIFTY-50 index in Oct 2018, when it returned +21.86% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. NLCINDIA had a longer winning streak of losing months than NIFTY-50 index. It went down in 5 straight months (from May 2018 to Sep 2018) during which period it delivered -22.27%. It is interesting to note that both NLCINDIA and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.

NLCINDIA 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 NLCINDIA's volatility from 26 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 NLCINDIA has significant negative skewness in it's return distribution. This indicates that NLCINDIA is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in NLCINDIA), three large cap instruments that deserve special mention are TCS, BAJFINANCE and TORNTPHARM. They have all outperformed the market and must be closely watched for investment opportunities.