Forging THEME

1507.26 -5.06 (-0.34%) Sell

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FORGING THEME investors check their stop-losses as it underperforms

13 min read

Forging performed worse than the broader market on Friday. It returned -0.34% to close at 1507.26. On a day when the overall market breadth was 71%, it closed higher than 52% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.13%.

[Theme constituents]

~FORGING is currently in a down trend. The current bearish signal has generated a profit of +2.11% for investors in the last three months.

Trend

~FORGING has been underperforming the NIFTY-50 index in recent time, after having outperformed till 28 Dec, 2017. Over the last 2 years 11 months and 13 days, ~FORGING outperformed the NIFTY-50 index on 51% days.

~FORGING returned losses on 60% 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 +4.7%, during this period, on Wednesday, 10 Oct, 2018. There was initially a bearish trend during this period which started on 27 Sep, 2018 and went on till 9 Oct, 2018. The trend delivered -11.87% losses to investors. This was followed by a bullish trend that started on 12 Oct, 2018 and ended on 16 Oct, 2018. This bullish trend delivered +4.75% to investors.

On monthly basis, ~FORGING delivered losses in more months over the last year, than profits. ~FORGING delivered profits less regularly than NIFTY-50 index. ~FORGING significantly outperformed NIFTY-50 index in Apr 2018, when it returned +8.17% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. ~FORGING and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both ~FORGING and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

The only limit to our realization of tomorrow will be our doubts of today.
-- Franklin D. Roosevelt

~FORGING 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 ~FORGING's volatility from 17 Sep, 2018 to 12 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 ~FORGING 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.

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

On a general note (since you are interested in ~FORGING), BAJFINANCE is a large cap that deserves to be closely tracked for investment opportunities.

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