HOMELOANS THEME investors looking to add more to current positions

Home Loans delivered good returns today. It grew by +1.11% to close at 1332.49. During the last week it grew by +9.75%.

[Theme constituents]

Buy-and-Hold investors in ~HOMELOANS experienced a maximum drawdown of -32.82% over the last three months. It lost -22.5% during this strong down trending period. There were no long signals during this period, where the short signal generated good profits of +22.5% for investors.

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~HOMELOANS has been underperforming the NIFTY-50 index in recent time, after having outperformed till 15 Jun, 2017. Over the last 2 years 11 months and 13 days, ~HOMELOANS underperformed the NIFTY-50 index on 47% days. Which indicates that on days ~HOMELOANS 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 ~HOMELOANS was mostly loss making and delivered on average -0.38% per day. It's best return during this period (of +6.25%) was on Wednesday, 10 Oct, 2018. While it's worst loss in the same period (of -9.62%) was on Friday, 21 Sep, 2018. There was initially a bearish trend during this period which started on 18 Sep, 2018 and went on till 25 Sep, 2018. The trend delivered -19.88% losses to investors. This was followed by a bullish trend that started on 6 Nov, 2018 and ended on 15 Nov, 2018. This bullish trend delivered +4.17% to investors.

~HOMELOANS had 5 profitable and 7 loss making months over the last year. During the last year, number of profitable months of ~HOMELOANS and NIFTY-50 index were the same. ~HOMELOANS was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -25.29% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~HOMELOANS had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -32.19%. It is interesting to note that both ~HOMELOANS and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Don't always trust what you see. In a bull market even a duck looks like a swan.
-- Vijay Kedia

~HOMELOANS is becoming more 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 ~HOMELOANS's volatility from 17 Sep, 2018 to 19 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 ~HOMELOANS has significant positive skewness in it's return distribution. This indicates that investors can expect ~HOMELOANS to recover from drawdowns quickly. Which makes ~HOMELOANS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

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