173.3 +4.15 (+2.39%) Sell

SIMPLEXINF does a dead cat bounce, it's still too early to buy into it

13 min read

SIMPLEX INFRASTRUCTURES L outperformed on Wednesday. It surged by +2.39% to close at 173.3. On a day when the overall market breadth was 70%, it closed higher than 27% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0084%.

[Themes containing SIMPLEXINF]

SIMPLEXINF is currently in a bearish trend. The current bearish signal has generated a profit of +17.79% for investors in the last three months.


SIMPLEXINF has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 15 Jan, 2018 to 21 Jan, 2019. Over the last 3 years and 1 month, SIMPLEXINF underperformed the NIFTY-50 index on 55% days.

SIMPLEXINF returned losses on 62% days in the last three months. During this time, it delivered on average -0.28% per day. It delivered it's worst daily return of -7.68%, during this period, on Monday, 21 Jan, 2019. The longest stort-term trend during this period was 6 losing days, which started on 7 Dec, 2018 and ended on 14 Dec, 2018. This bearish trend lost -9.08% of investor capital.

The last 12 months saw SIMPLEXINF's investors making profits in 2 months and incurring losses in 10 months. SIMPLEXINF was less consistent in delivering monthly returs than NIFTY-50 index. SIMPLEXINF was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -26.79% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SIMPLEXINF had a longer winning streak of losing months than NIFTY-50 index. It went down in 6 straight months (from Aug 2018 to Jan 2019) during which period it delivered -79.29%. It is interesting to note that both SIMPLEXINF and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"If all the economists were laid end to end, they'd never reach a conclusion.

SIMPLEXINF 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 surge in SIMPLEXINF's volatility from 24 Oct, 2018 to 29 Oct, 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 SIMPLEXINF has significant negative skewness in it's return distribution. This indicates that SIMPLEXINF is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in SIMPLEXINF you may find it interesting to know that HINDUNILVR, BRITANNIA and BAJFINANCE are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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