SWARAJ ENGINES LTD

1550.7 -49.33 (-3.18%) Buy

SWARAJENG investors herd to book profits while the going is good

14 min read

SWARAJ ENGINES LTD was among the worst performers on Friday. It delivered -3.18% to close at 1550.7. On a day when the overall market breadth was 71%, it closed higher than 60% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing SWARAJENG]

Buy-and-Hold investors in SWARAJENG experienced a maximum drawdown of -8.05% over the last three months. It increased by +3.37% during this 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.

Trend

SWARAJENG has been outperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 18 Feb, 2016 to 6 Jul, 2017. Over the last 3 years and 1 month, SWARAJENG outperformed the NIFTY-50 index on 46% days. Which indicates that on days SWARAJENG outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months SWARAJENG delivered losses on 56% days. However, it still managed to end this period in a profit. It's best return during this period (of +5.98%) was on Thursday, 17 Jan, 2019. While it's worst loss in the same period (of -3.33%) was on Tuesday, 23 Oct, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +9.73%) started on 29 Oct, 2018 and went on till 2 Nov, 2018 while the bearish trend (which returned -8.3%) started on 22 Oct, 2018 and went on till 26 Oct, 2018.

The last 12 months saw SWARAJENG's investors making profits in 6 months and incurring losses in 6 months. During the last year, SWARAJENG delivered profits in more months than NIFTY-50 index. SWARAJENG was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -18.53% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SWARAJENG had a longer winning streak of losing months than NIFTY-50 index. It went down in 6 straight months (from May 2018 to Oct 2018) during which period it delivered -35.04%. It is interesting to note that both SWARAJENG and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

I'd like to live as a poor man with lots of money.
-- Pablo Picasso

SWARAJENG 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 SWARAJENG's volatility from 30 Oct, 2018 to 21 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 SWARAJENG has significant negative skewness in it's return distribution. This indicates that SWARAJENG is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in SWARAJENG you may find it interesting to know that HATSUN has shown remarkable performance this year and deserves to be on every investors' watchlist.

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