Tata Group THEME

1570.07 +5.47 (+0.35%) Buy

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TATAGRP THEME continues it's uptrend, although on a weaker note

14 min read

Tata Group managed to outperform the broader market on Tuesday. It surged by +0.35% to close at 1570.07. On a day when the overall market breadth was 71%, it closed higher than 51% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.19%.

[Theme constituents]

Buy-and-Hold investors in ~TATAGRP experienced a maximum drawdown of -13.77% over the last three months. It delivered -6.8% 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 +6.59%.


~TATAGRP has been outperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 2 Mar, 2016 to 8 Jan, 2018. Over the last 2 years and 12 months, ~TATAGRP outperformed the NIFTY-50 index on 52% days.

~TATAGRP returned losses on 54% days in the last three months. During this time, it delivered on average -0.11% per day. It delivered it's best daily return of +3.33%, during this period, on Monday, 29 Oct, 2018. The longest stort-term trends during this period were 6 profitable and losing days. The bullish trend (which returned +6.09%) started on 11 Dec, 2018 and went on till 18 Dec, 2018 while the bearish trend (which returned -6.8%) started on 21 Sep, 2018 and went on till 28 Sep, 2018.

The last 12 months saw ~TATAGRP's investors making profits in 5 months and incurring losses in 7 months. ~TATAGRP was less consistent in delivering monthly returs than NIFTY-50 index. ~TATAGRP was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -9.84% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~TATAGRP 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 -10.26%. It is interesting to note that both ~TATAGRP and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

I'm a great believer in luck, and I find the harder I work the more I have of it.
-- Thomas Jefferson

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

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

Based on your interest in ~TATAGRP you may find it interesting to know that IGARASHI, EXCELINDUS and VMART have all shown remarkable performance this year and deserve to be on every investor's watchlist.

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