PAINT THEME investors considering profit booking at current levels

Paint is looking better than most other alternatives on Friday. It grew by +0.93% to close at 1627.57. 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]

~PAINT is currently in a down trend. The current bearish signal has generated a profit of +2.12% for investors in the last three months.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

~PAINT has been outperforming the NIFTY-50 index in recent time. Over the last 2 years 11 months and 13 days, ~PAINT outperformed the NIFTY-50 index on 50% days. Which indicates that on days ~PAINT outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months ~PAINT was mostly loss making and delivered on average -0.02% per day. It's best return during this period (of +4.59%) was on Friday, 12 Oct, 2018. While it's worst loss in the same period (of -4.59%) was on Tuesday, 23 Oct, 2018. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 5 Nov, 2018. The bullish trend returned +9.52% to investors. This was followed by a bearish trend that started on 30 Nov, 2018 and ended on 6 Dec, 2018. This bearish trend lost -4.57% of investor capital.

~PAINT had 6 profitable and 6 loss making months over the last year. ~PAINT was profitable in more months than NIFTY-50 index. ~PAINT was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -8.8% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~PAINT had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Mar 2018 to May 2018) during which period it delivered +9.4%. It is interesting to note that both ~PAINT and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

It is time for us to stand and cheer for the doer, the achiever, the one who recognizes the challenge and does something about it.
-- Vince Lombardi

~PAINT 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 ~PAINT's volatility from 27 Sep, 2018 to 23 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 ~PAINT has significant positive skewness in it's return distribution. This indicates that investors can expect ~PAINT to recover from drawdowns quickly. Which makes ~PAINT a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ~PAINT), two small cap instruments that deserve special mention are VIPIND and IGARASHI. They have significantly outperformed the overall market.