Chemical THEME

3306.16 +7.8 (+0.24%) Sell

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CHEMICALS THEME shows sign of weakness as investors do cost averaging

14 min read

Chemical showed marginal outperformance today. It increased by +0.24% to close at 3306.16. During the last week it increased by +2.42%.

[Theme constituents]

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


~CHEMICALS has been outperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 26 Feb, 2016 to 15 Jan, 2018. Over the last 2 years and 12 months, ~CHEMICALS outperformed the NIFTY-50 index on 56% days.

During the last three months ~CHEMICALS was mostly profitable and delivered on average +0.01% per day. It's best return during this period (of +3.8%) was on Wednesday, 10 Oct, 2018. While it's worst loss in the same period (of -3.59%) was on Monday, 24 Sep, 2018. The longest stort-term trend during this period was 10 profitable days, which started on 26 Oct, 2018 and went on till 9 Nov, 2018. This bullish trend returned +11.63% to investors.

The last 12 months saw ~CHEMICALS's investors making profits in 7 months and incurring losses in 5 months. During the last year, ~CHEMICALS delivered profits in more months than NIFTY-50 index. ~CHEMICALS was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -10.41% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~CHEMICALS had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered +8.97%. It is interesting to note that both ~CHEMICALS and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Security depends not so much upon how much you have, as upon how much you can do without.
-- Joseph Wood Krutch

~CHEMICALS 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 ~CHEMICALS's volatility from 24 Sep, 2018 to 4 Dec, 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 ~CHEMICALS has significant positive skewness in it's return distribution. This indicates that investors can expect ~CHEMICALS to recover from drawdowns quickly. Which makes ~CHEMICALS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ~CHEMICALS you may find it interesting to know that BRITANNIA has delivered similar performance as ~CHEMICALS and can be considered as an alternative investment candidate (to ~CHEMICALS).

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