SBIN continues it's uptrend, although on a weaker note
18 Dec, 201814 min read
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STATE BANK OF INDIA is looking better than most other alternatives on Tuesday. It grew by +1.12% to close at 292.75. It is currently trading +25% above it's 52 week low of 233.2 and is down only -11% from it's 52 week high.
SBIN is currently in a up trend. Over the last three months Buy-and-Hold has been a better strategy (returning +7.83%) for SBIN's investors than trading long signals.
SBIN has been outperforming the NIFTY-50 index in recent time. Over the last 2 years and 12 months, SBIN underperformed the NIFTY-50 index on 53% days.
During the last three months SBIN was mostly profitable and delivered on average +0.15% per day. It's best return during this period (of +7.98%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -5.92%) was on Thursday, 11 Oct, 2018. There was initially a bearish trend during this period which started on 4 Dec, 2018 and went on till 10 Dec, 2018. The trend delivered -4.47% losses to investors. This was followed by a bullish trend that started on 11 Dec, 2018 and ended on 18 Dec, 2018. This bullish trend delivered +6.59% to investors.
SBIN had 8 profitable and 4 loss making months over the last year. SBIN was profitable in more months than NIFTY-50 index. SBIN was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Feb 2018, returned -14.45% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SBIN had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered +6.76%. It is interesting to note that both SBIN and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
Success usually comes to those who are too busy to be looking for it.
-- Henry David Thoreau
SBIN is becoming less volatile overall. In comparison, the NIFTY-50 index is seeing a fall in volatility. During the last three months, there was a significant fall in SBIN's volatility from 21 Sep, 2018 to 7 Dec, 2018. While there was a significant fall in the NIFTY-50 index's volatility from 21 Sep, 2018 to 5 Dec, 2018.
Advanced/professional short-term investors should note that SBIN has significant negative skewness in it's return distribution. This indicates that SBIN is very risky for short-term investment and can significantly underperform for long durations.
Investors trading in SBIN derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.
NIFTY-50 index has more chance of extreme outcomes than SBIN. Therefore, NIFTY-50 must receive a lower allocation than SBIN in your portfolio. NIFTY-50 index usually has shorter drawdown period than SBIN.
On a general note (since you are interested in SBIN), if you are evaluating SBIN as an investment candidate, then you should read about JKCEMENT which has delivered similar performance and can help diversify your portfolio.
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