RESPONIND shows sign of weakness as investors do cost averaging
18 Jan, 201913 min read
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RESPONSIVE INDUSTRIES LTD managed to outperform the broader market on Friday. It fell by 0.0% to close at 94.85. It is currently trading +157% above it's 52 week low of 36.9 and is down only -6% from it's 52 week high.
Buy-and-Hold investors in RESPONIND experienced a maximum drawdown of -15.93% over the last three months. It surged by +27.83% during this strong bullish trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals. The net profit from Long signals was +15.7%.
RESPONIND has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 11 Jan, 2016 to 29 Jan, 2018. Over the last 3 years and 1 month, RESPONIND underperformed the NIFTY-50 index on 54% days.
RESPONIND was profitable on 53% days in the last three months. During this time, it delivered on average +0.45% per day. It delivered it's worst daily return of -15.93%, during this period, on Thursday, 13 Dec, 2018. The longest stort-term trend during this period was 12 profitable days, which started on 23 Oct, 2018 and went on till 7 Nov, 2018. This bullish trend returned +22.93% to investors.
During the last year RESPONIND had 8 profitable months and 4 loss making months. RESPONIND returned profits in more months than NIFTY-50 index. RESPONIND significantly outperformed NIFTY-50 index in Apr 2018, when it returned +110.45% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. RESPONIND had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Jun 2018 to Aug 2018) during which period it delivered +16.95%. It is interesting to note that both RESPONIND and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
"Finance is wholly different from the rest the economy.
RESPONIND 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 RESPONIND's volatility from 19 Oct, 2018 to 27 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 RESPONIND has significant negative skewness in it's return distribution. This indicates that RESPONIND is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than RESPONIND. Therefore, NIFTY-50 must receive a lower allocation than RESPONIND in your portfolio. NIFTY-50 index usually has shorter drawdown period than RESPONIND.
Based on your interest in RESPONIND you may find it interesting to know that IEX is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to IEX or sufficiently diversifying your portfolio.
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