28.5 -0.83 (-2.9%) Buy

RPOWER investors herd to book profits while the going is good

13 min read

RELIANCE POWER LTD. ranked among the worst performers today. It delivered -2.9% to close at 28.5. During the last week it delivered -1.38% and saw a maximum drawdown of -5.79% before bouncing back.

[Themes containing RPOWER]

RPOWER is currently in a bullish trend. Over the last three months 3 bullish signals in RPOWER have generated a profit of +1.29% for investors.


RPOWER has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 11 Jan, 2016 to 27 Sep, 2018. Over the last 3 years and 1 month, RPOWER underperformed the NIFTY-50 index on 53% days.

During the last three months RPOWER delivered losses on 53% days. However, it still managed to end this period in a profit. It's best return during this period (of +7.85%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -4.97%) was on Thursday, 6 Dec, 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 +5.34% to investors.

The last 12 months saw RPOWER's investors making profits in 3 months and incurring losses in 9 months. RPOWER was less consistent in delivering monthly returs than NIFTY-50 index. RPOWER was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -30.86% compared to -6.42% returned by NIFTY-50 index in Sep 2018. RPOWER 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 -36.45%. It is interesting to note that both RPOWER and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Money is like manure. You have to spread it around or it smells.

RPOWER 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 RPOWER's volatility from 19 Oct, 2018 to 21 Dec, 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 RPOWER has significant positive skewness in it's return distribution. This indicates that investors can expect RPOWER to recover from drawdowns quickly. Which makes RPOWER a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

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

Based on your interest in RPOWER you may find it interesting to know that RESPONIND, NIITTECH and VINATIORGA are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter