Stable Dividend THEME

1735.02 +13.36 (+0.77%) Sell

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STABLEDIVIDENDS THEME shows sign of weakness as investors do cost averaging

14 min read

Stable Dividend ranked better than it's peers on Friday. It delivered +0.77% to close at 1735.02. On a day when the overall market breadth was 71%, it closed higher than 60% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.13%.

[Theme constituents]

Buy-and-Hold investors in ~STABLEDIVIDENDS experienced a maximum drawdown of -14.77% over the last three months. It fell by -6.88% during this bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +9.18%.


~STABLEDIVIDENDS has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 29 Mar, 2016 to 9 Jan, 2018. Over the last 2 years 11 months and 13 days, ~STABLEDIVIDENDS outperformed the NIFTY-50 index on 52% days.

During the last three months ~STABLEDIVIDENDS delivered profits on 50% days. However, it still managed to end this period in a loss. It's best return during this period (of +3.18%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -4.22%) was on Wednesday, 28 Nov, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 6 Nov, 2018 and went on till 15 Nov, 2018. This bullish trend returned +5.7% to investors.

During the last year ~STABLEDIVIDENDS had 5 profitable months and 7 loss making months. Profitable number of months of ~STABLEDIVIDENDS and NIFTY-50 index were the same. ~STABLEDIVIDENDS was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -13.92% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~STABLEDIVIDENDS had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -10.54%. It is interesting to note that both ~STABLEDIVIDENDS and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

When buying shares, ask yourself, would you buy the whole company?
-- Rene Rivkin

~STABLEDIVIDENDS 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 surge in ~STABLEDIVIDENDS's volatility from 17 Sep, 2018 to 1 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 ~STABLEDIVIDENDS has significant positive skewness in it's return distribution. This indicates that investors can expect ~STABLEDIVIDENDS to recover from drawdowns quickly. Which makes ~STABLEDIVIDENDS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ~STABLEDIVIDENDS you may find it interesting to know that RESPONIND and HATSUN have both shown remarkable performance this year and deserve to be on every investors' watchlist.

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