TATACHEM investors considering profit booking at current levels

TATA CHEMICALS LTD ranked better than it's peers today. It delivered +0.09% to close at 693.7. During the last week it delivered +0.09% and saw a maximum drawdown of -0.32% before bouncing back.

[Themes containing TATACHEM]

TATACHEM is currently in a bullish trend. Over the last three months Buy-and-Hold has been a better strategy (returning +3.24%) for TATACHEM's investors than trading long signals.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

TATACHEM has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 2 Mar, 2016 to 26 Oct, 2017. Over the last 3 years and 1 month, TATACHEM outperformed the NIFTY-50 index on 50% days. Which indicates that on days TATACHEM 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 TATACHEM delivered losses on 53% days. However, it still managed to end this period in a profit. It's best return during this period (of +2.64%) was on Monday, 17 Dec, 2018. While it's worst loss in the same period (of -2.51%) was on Monday, 10 Dec, 2018. The longest stort-term trend during this period was 4 losing days, which started on 30 Nov, 2018 and ended on 5 Dec, 2018. This bearish trend lost -4.76% of investor capital.

The last 12 months saw TATACHEM's investors making profits in 5 months and incurring losses in 7 months. During the last year, TATACHEM and NIFTY-50 index had the same number of profitable months. TATACHEM significantly outperformed NIFTY-50 index in Apr 2018, when it returned +10.82% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. TATACHEM and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both TATACHEM and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

It's how you deal with failure that determines how you achieve success.
-- David Feherty

TATACHEM is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in TATACHEM's volatility from 19 Oct, 2018 to 17 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 TATACHEM has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

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

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

Based on your interest in TATACHEM you may find it interesting to know that NIFTY50-DIV-POINT, ~HOMEAPPLIANCES and TIDEWATER are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.