Profit booking on the minds of TATASTEEL investors as it ranks better than it's peers but, has not managed to breakout

TATA STEEL LIMITED is looking better than most other alternatives on Tuesday. It grew by +0.57% to close at 527.0. It is currently trading -31% below it's 52 week high of 773.5.

[Themes containing TATASTEEL]

TATASTEEL is currently in a down trend. The current bearish signal has generated a profit of +5.86% for investors in the last three months.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

TATASTEEL has been underperforming the NIFTY-50 index in recent time, after having outperformed till 15 Jan, 2018. Over the last 2 years and 12 months, TATASTEEL outperformed the NIFTY-50 index on 51% days.

During the last three months TATASTEEL delivered profits on 50% days. However, it still managed to end this period in a loss. It's best return during this period (of +4.02%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -4.95%) was on Friday, 28 Sep, 2018. There was initially a bullish trend during this period which started on 1 Nov, 2018 and went on till 5 Nov, 2018. The bullish trend returned +4.23% to investors. This was followed by a bearish trend that started on 20 Nov, 2018 and ended on 27 Nov, 2018. This bearish trend lost -10.76% of investor capital.

On monthly basis, TATASTEEL delivered losses in more months over the last year, than profits. TATASTEEL delivered profits less regularly than NIFTY-50 index. TATASTEEL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Mar 2018, returned -15.2% compared to -6.42% returned by NIFTY-50 index in Sep 2018. TATASTEEL had a longer winning streak of losing months than NIFTY-50 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -13.11%. It is interesting to note that both TATASTEEL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

I'm only rich because I know when I'm wrong..I basically have survived by recognizing my mistakes.
-- George Soros

TATASTEEL 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 surge in TATASTEEL's volatility from 19 Sep, 2018 to 21 Sep, 2018. While there was a significant fall in the NIFTY-50 index's volatility from 21 Sep, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that TATASTEEL 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 TATASTEEL derivatives at this moment can consider 'Long Straddle' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in TATASTEEL), three small cap instruments that deserve special mention are VINATIORGA, RESPONIND and NIITTECH. They have all outperformed the market and must be closely watched for investment opportunities.