WIPRO investors treading cautiously as performance is muted

WIPRO LTD is a falling knife that can bleed you if you catch it today. It lost -1.34% to close at 335.05. During the last week it returned +1.51% and saw a maximum drawdown of -1.64% before bouncing back.

[Themes containing WIPRO]

Buy-and-Hold investors in WIPRO experienced a maximum drawdown of -8.38% over the last three months. It returned +0.71% during this flat trending period. There were both Long and Short signals during this period, while the long signals were marginally more profitable than the short signals.

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WIPRO has been outperforming the NIFTY-50 index in recent time. Over the last 2 years and 12 months, WIPRO underperformed the NIFTY-50 index on 49% days. Which indicates that on days WIPRO underperforms the NIFTY-50 index, it's performance is marginally worse than on the days it outperforms the NIFTY-50 index.

During the last three months WIPRO delivered losses on 54% days. However, it still managed to end this period in a profit. It's best return during this period (of +3.7%) was on Monday, 26 Nov, 2018. While it's worst loss in the same period (of -4.07%) was on Tuesday, 23 Oct, 2018. There was initially a bearish trend during this period which started on 24 Sep, 2018 and went on till 27 Sep, 2018. The trend delivered -4.92% losses to investors. This was followed by a bullish trend that started on 29 Nov, 2018 and ended on 5 Dec, 2018. This bullish trend delivered +8.18% to investors.

WIPRO had 5 profitable and 7 loss making months over the last year. During the last year, WIPRO underperformed NIFTY-50 index on monthly return basis. WIPRO significantly outperformed NIFTY-50 index in Aug 2018, when it returned +8.99% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. WIPRO had a longer winning streak of losing months than NIFTY-50 index. It went down in 6 straight months (from Jan 2018 to Jun 2018) during which period it delivered -21.93%.

Wealth is not his that has it, but his that enjoys it.
-- Benjamin Franklin

WIPRO 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 WIPRO's volatility from 19 Sep, 2018 to 25 Oct, 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 WIPRO has significant positive skewness in it's return distribution. This indicates that investors can expect WIPRO to recover from drawdowns quickly. Which makes WIPRO a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

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

On a general note (since you are interested in WIPRO), three instruments that deserve special mention are ~MKTCAP201TO250, DMART and BAJFINANCE. They have all outperformed the market and must be closely watched for investment opportunities.