Healthcare THEME

1270.31 +16.77 (+1.32%) Buy

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Stop-loss on the minds of HEALTHCARE THEME investors as it performed worse than the broader market

13 min read

Healthcare delivered massive losses on Tuesday. It delivered +1.32% to close at 1270.31. On a day when the overall market breadth was 70%, it closed higher than 46% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0036%.

[Theme constituents]

~HEALTHCARE is currently in a bullish trend. The current bullish signal has generated a profit of +9.25% for ~HEALTHCARE's investors in the last three months.


~HEALTHCARE has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 21 Nov, 2016 to 26 Oct, 2017. Over the last 3 years and 1 month, ~HEALTHCARE underperformed the NIFTY-50 index on 51% days.

During the last three months ~HEALTHCARE was mostly profitable and delivered on average +0.25% per day. It's best return during this period (of +5.06%) was on Thursday, 17 Jan, 2019. While it's worst loss in the same period (of -3.44%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 4 profitable days, which started on 26 Nov, 2018 and went on till 29 Nov, 2018. This bullish trend returned +0.82% to investors.

The last 12 months saw ~HEALTHCARE's investors making profits in 7 months and incurring losses in 5 months. During the last year, ~HEALTHCARE delivered profits in more months than NIFTY-50 index. ~HEALTHCARE significantly outperformed NIFTY-50 index in Jan 2019, when it returned +13.4% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. ~HEALTHCARE had a longer winning streak of profitable months than NIFTY-50 index. It went up in 4 straight months (from May 2018 to Aug 2018) during which period it delivered +27.22%.

Let's not allow the voice of the people to be overwhelmed by the siren song of those who opposed regulation, who demanded that government should stand aside and let finance and business run the show.
-- David Blunkett

~HEALTHCARE is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in ~HEALTHCARE's volatility from 24 Oct, 2018 to 27 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 ~HEALTHCARE has significant negative skewness in it's return distribution. This indicates that ~HEALTHCARE is very risky for short-term investment and can significantly underperform for long durations.

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

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

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