Don't go profit booking on RELAXO now, it delivered a decent return
18 Jan, 201913 min read
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RELAXO outperformed today. On a longer term basis, investors in RELAXO FOOT LTD. made +0.15% per day. Friday's performance of +1.2% was a outperformance compared to it's daily average.
RELAXO showed a bullish trend over the last 3 months. During this period RELAXO surged by +4.63% and saw a maximum drawdown of -10.27%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in RELAXO till volatility reduces and a clear trend emerges.
RELAXO has been outperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 4 Aug, 2017 to 31 Oct, 2018. Over the last 3 years and 1 month, RELAXO outperformed the NIFTY-50 index on 49% days. Which indicates that on days RELAXO outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.
RELAXO was profitable on 52% days in the last three months. During this time, it delivered on average +0.08% per day. It delivered it's best daily return of +3.7%, during this period, on Monday, 22 Oct, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 28 Dec, 2018 and went on till 7 Jan, 2019. This bullish trend returned +4.19% to investors.
The last 12 months saw RELAXO's investors making profits in 7 months and incurring losses in 5 months. During the last year, RELAXO delivered profits in more months than NIFTY-50 index. RELAXO significantly outperformed NIFTY-50 index in Jul 2018, when it returned +17.56% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. RELAXO had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Mar 2018 to May 2018) during which period it delivered +13.81%. It is interesting to note that both RELAXO and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
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RELAXO is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in RELAXO's volatility from 23 Oct, 2018 to 15 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 RELAXO has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
NIFTY-50 index has more chance of extreme outcomes than RELAXO. Therefore, NIFTY-50 must receive a lower allocation than RELAXO in your portfolio. NIFTY-50 index usually has shorter drawdown period than RELAXO.
Based on your interest in RELAXO you may find it interesting to know that MERCK and LTTS have both shown remarkable performance this year and deserve to be on every investors' watchlist.
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