210.05 -7.33 (-3.49%) Sell

RELCAPITAL is a falling knife, continues to bleed every investor trying to catch it

13 min read

RELIANCE CAPITAL LTD significantly underperformed on Friday. It fell by -3.49% to close at 210.05. It is currently trading -64% below it's 52 week high of 591.15.

[Themes containing RELCAPITAL]

Buy-and-Hold investors in RELCAPITAL experienced a maximum drawdown of -23.32% over the last three months. It fell by -12.77% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals.


RELCAPITAL has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 1 Sep, 2017 to 18 Jan, 2019. One must note that RELCAPITAL is currently at it's worst performance to the NIFTY-50 index which makes it a bad investment candidate. Over the last 3 years and 1 month, RELCAPITAL underperformed the NIFTY-50 index on 51% days.

During the last three months RELCAPITAL delivered profits on 52% days. However, it still managed to end this period in a loss. It's best return during this period (of +6.22%) was on Friday, 28 Dec, 2018. While it's worst loss in the same period (of -5.9%) was on Wednesday, 5 Dec, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 29 Oct, 2018 and went on till 2 Nov, 2018. This bullish trend returned +12.31% to investors.

During the last year RELCAPITAL had 3 profitable months and 9 loss making months. RELCAPITAL returned profits in fewer months than NIFTY-50 index. RELCAPITAL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -38.81% compared to -6.42% returned by NIFTY-50 index in Sep 2018. RELCAPITAL 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 -28.36%.

Happiness lies in the joy of achievement and the thrill of creative effort.
-- Franklin D. Roosevelt

RELCAPITAL 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 RELCAPITAL's volatility from 19 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 RELCAPITAL has significant positive skewness in it's return distribution. This indicates that investors can expect RELCAPITAL to recover from drawdowns quickly. Which makes RELCAPITAL a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in RELCAPITAL derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in RELCAPITAL you may find it interesting to know that LTTS is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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