82.85 -1.67 (-2.01%) Buy

Stop-loss on the minds of PNB investors as it ranked worse than it's peers

13 min read

PUNJAB NATIONAL BANK was among the worst performers today. It delivered -2.01% to close at 82.85. During the last week it delivered +0.42% and saw a maximum drawdown of -2.01% before bouncing back.

[Themes containing PNB]

PNB is currently in a bullish trend. Over the last three months 2 bullish signals in PNB have generated a profit of +11.82% for investors.


PNB has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 26 Oct, 2017 to 28 Sep, 2018. Over the last 3 years and 1 month, PNB underperformed the NIFTY-50 index on 53% days.

During the last three months PNB was mostly profitable and delivered on average +0.39% per day. It's best return during this period (of +7.18%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -7.07%) was on Friday, 2 Nov, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 11 Dec, 2018 and went on till 19 Dec, 2018. This bullish trend returned +17.44% to investors.

The last 12 months saw PNB's investors making profits in 5 months and incurring losses in 7 months. During the last year, PNB and NIFTY-50 index had the same number of profitable months. PNB was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Feb 2018, returned -40.82% compared to -6.42% returned by NIFTY-50 index in Sep 2018. PNB had a longer winning streak of losing months than NIFTY-50 index. It went down in 5 straight months (from Feb 2018 to Jun 2018) during which period it delivered -69.06%. It is interesting to note that both PNB and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

A highly developed stock exchange cannot be a club for the cult of ethics.
-- Max Weber

PNB 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 PNB's volatility from 2 Nov, 2018 to 11 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 PNB has significant negative skewness in it's return distribution. This indicates that PNB is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in PNB you may find it interesting to know that BAJFINANCE and TCS are both large caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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