TATA CONSULTANCY SERV LT ranked better than it's peers on Friday. It delivered +0.34% to close at 1900.65. On a day when the overall market breadth was 71%, it closed higher than 48% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
TCS showed a flat trend over the last 3 months. During this period TCS delivered -0.45% and saw a maximum drawdown of -10.11%. There was a short signal during this period which returned +0.45%.
TCS has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 17 Jul, 2017 to 1 Oct, 2018. Over the last 3 years and 1 month, TCS outperformed the NIFTY-50 index on 51% days.
During the last three months TCS was mostly profitable and delivered on average +0.01% per day. It's best return during this period (of +4.96%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -3.53%) was on Wednesday, 21 Nov, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +9.25%) started on 22 Nov, 2018 and went on till 28 Nov, 2018 while the bearish trend (which returned -5.02%) started on 18 Dec, 2018 and went on till 21 Dec, 2018.
During the last year TCS had 7 profitable months and 5 loss making months. TCS returned profits in more months than NIFTY-50 index. TCS significantly outperformed NIFTY-50 index in Apr 2018, when it returned +21.73% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. TCS had a longer winning streak of profitable months than NIFTY-50 index. It went up in 4 straight months (from Jun 2018 to Sep 2018) during which period it delivered +23.42%. It is interesting to note that both TCS and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
Try not to become a man of success. Rather become a man of value.
-- Albert Einstein
TCS 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 TCS's volatility from 31 Oct, 2018 to 20 Dec, 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 TCS has significant positive skewness in it's return distribution. This indicates that investors can expect TCS to recover from drawdowns quickly. Which makes TCS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in TCS derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.
TCS has more chance of extreme outcomes than the NIFTY-50 index. Therefore, TCS must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than TCS.
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