16.65 -0.29 (-1.77%) Sell

Looking to invest in PFS? Avoid at the moment as it is a falling knife that can bleed you if you catch it

13 min read

PTC INDIA FIN SERV LTD is a falling knife that can bleed you if you catch it on Tuesday. It fell by -1.77% to close at 16.65. It is currently trading -55% below it's 52 week high of 37.2.

[Themes containing PFS]

PFS showed a strong bullish trend over the last 3 months. During this period PFS surged by +16.43% and saw a maximum drawdown of -9.77%. There were 2 long signals during this period that returned a cumulative of +7.95% to investors.


PFS has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 15 May, 2017 to 28 Aug, 2018. Over the last 3 years and 1 month, PFS underperformed the NIFTY-50 index on 56% days.

PFS returned losses on 56% days in the last three months. During this time, it delivered on average +0.27% per day. It delivered it's best daily return of +10.48%, during this period, on Tuesday, 13 Nov, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 11 Dec, 2018 and went on till 18 Dec, 2018. This bullish trend returned +10.39% to investors.

During the last year PFS had 6 profitable months and 6 loss making months. PFS returned profits in more months than NIFTY-50 index. PFS was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -26.44% compared to -6.42% returned by NIFTY-50 index in Sep 2018. PFS 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 +18.65%. It is interesting to note that both PFS and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it .
-- Peter Lynch

PFS 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 surge in PFS's volatility from 23 Oct, 2018 to 13 Nov, 2018. 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 PFS has positive skewness in it's return distribution. This indicates that investors can expect PFS to make attempts to recover from drawdowns quickly. Which makes PFS a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

On a general note (since you are interested in PFS), three mid cap instruments that deserve special mention are LTI, CUB and BATAINDIA. They have all outperformed the market and must be closely watched for investment opportunities.

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