76.0 0.0 (0.0%) Sell

TATAPOWER shows sign of weakness as investors do cost averaging

13 min read

TATA POWER CO LTD managed to marginally outperform the broader market on Friday. It lost 0.0% to close at 76.0. It is currently trading -20% below it's 52 week high of 95.35.

[Themes containing TATAPOWER]

TATAPOWER is currently in a down trend. The previous short signal in TATAPOWER has not been profitable for investors in general. If you are short on TATAPOWER at current levels please make sure that your allocation is limited and that your portfolio is well diversified.


TATAPOWER has been underperforming the NIFTY-50 index in recent time, after having outperformed till 3 Jan, 2018. Over the last 3 years and 1 month, TATAPOWER underperformed the NIFTY-50 index on 54% days.

TATAPOWER returned losses on 54% days in the last three months. During this time, it delivered on average +0.15% per day. It delivered it's best daily return of +12.63%, during this period, on Monday, 29 Oct, 2018. There was initially a bearish trend during this period which started on 22 Oct, 2018 and went on till 26 Oct, 2018. The trend delivered -1.79% losses to investors. This was followed by a bullish trend that started on 16 Nov, 2018 and ended on 20 Nov, 2018. This bullish trend delivered +2.08% to investors.

TATAPOWER had 5 profitable and 7 loss making months over the last year. During the last year, number of profitable months of TATAPOWER and NIFTY-50 index were the same. TATAPOWER was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -14.15% compared to -6.42% returned by NIFTY-50 index in Sep 2018. TATAPOWER and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both TATAPOWER and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Never invest emergency savings in the stock market.
-- Suze Orman

TATAPOWER 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 TATAPOWER's volatility from 29 Oct, 2018 to 15 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 TATAPOWER has significant negative skewness in it's return distribution. This indicates that TATAPOWER is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in TATAPOWER derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in TATAPOWER), two small cap instruments that deserve special mention are VINATIORGA and ASTRAZEN. They have significantly outperformed the overall market.

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