HDB investors not showing any loss of confidence as it pauses to catch its breath
14 Dec, 201813 min read
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HDFC BANK LTD (Foreign) performed worse than the broader market on Friday. It fell by -0.32% to close at 100.44. It is currently trading +15% above it's 52 week low of 86.7 and is down only -9% from it's 52 week high.
HDB is currently in a bullish trend. The current bullish signal has generated a profit of +8.84% for HDB's investors in the last three months.
HDB has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 4 Jan, 2017 to 20 Jul, 2018. Over the last 2 years 11 months and 10 days, HDB outperformed the SP500 index on 54% days.
HDB was profitable on 55% days in the last three months. During this time, it delivered on average +0.11% per day. It delivered it's worst daily return of -5.16%, during this period, on Monday, 10 Dec, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 21 Nov, 2018 and went on till 29 Nov, 2018. This bullish trend returned +7.14% to investors.
During the last year HDB had 4 profitable months and 8 loss making months. HDB returned profits in fewer months than SP500 index. HDB significantly outperformed SP500 index in Nov 2018, when it returned +14.07% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. HDB had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Jun 2018 to Oct 2018) during which period it delivered -15.93%.
"I grew up in Finance.
HDB is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in HDB's volatility from 17 Sep, 2018 to 25 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that HDB has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
HDB has more chance of extreme outcomes than the SP500 index. Therefore, HDB must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than HDB.
Based on your interest in HDB you may find it interesting to know that OPNT is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to OPNT or sufficiently diversifying your portfolio.
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