41.8 +0.61 (+1.46%) Sell

Don't go profit booking on SUTLEJTEX now, it delivered a decent return

13 min read

SUTLEJ TEXT & INDUS LTD outperformed today. It surged by +1.46% to close at 41.8. It's recent 5 day performance has been -1.08%, -0.36%, -2.45%, +1.3% and +0.12%.

[Themes containing SUTLEJTEX]

SUTLEJTEX showed a bearish trend over the last 3 months. During this period SUTLEJTEX delivered -3.58% and saw a maximum drawdown of -15.83%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in SUTLEJTEX till volatility reduces and a clear trend emerges.


SUTLEJTEX has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 12 Jan, 2018 to 22 Jan, 2019. Over the last 3 years and 1 month, SUTLEJTEX underperformed the NIFTY-50 index on 54% days.

SUTLEJTEX returned losses on 59% days in the last three months. During this time, it delivered on average -0.02% per day. It delivered it's best daily return of +9.75%, during this period, on Tuesday, 13 Nov, 2018. The longest stort-term trend during this period was 7 losing days, which started on 4 Dec, 2018 and ended on 12 Dec, 2018. This bearish trend lost -6.7% of investor capital.

The last 12 months saw SUTLEJTEX's investors making profits in 1 months and incurring losses in 11 months. SUTLEJTEX was less consistent in delivering monthly returs than NIFTY-50 index. SUTLEJTEX was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Feb 2018, returned -17.11% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SUTLEJTEX had a longer winning streak of losing months than NIFTY-50 index. It went down in 11 straight months (from Feb 2018 to Dec 2018) during which period it delivered -76.47%. It is interesting to note that both SUTLEJTEX and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Wide diversification is only required when investors do not understand what they are doing.

SUTLEJTEX 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 SUTLEJTEX's volatility from 24 Oct, 2018 to 10 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 SUTLEJTEX has significant negative skewness in it's return distribution. This indicates that SUTLEJTEX is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in SUTLEJTEX you may find it interesting to know that HATSUN and ~HOMEAPPLIANCES are highly volatile and therefore risky. Investors should consider limiting their exposure to these instruments (because of their volatile nature).

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