9.87 +0.21 (+2.17%) Buy

INFY investors rejoice as it outperforms

13 min read

INFOSYS LTD (Foreign) outperformed the broader market on Thursday. It increased by +2.17% to close at 9.87. It is currently trading +23% above it's 52 week low of 8.0 and is down only -6% from it's 52 week high.

[Themes containing INFY]

Buy-and-Hold investors in INFY experienced a maximum drawdown of -13.5% over the last three months. It fell by -4.36% 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 +1.5%.


INFY has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 15 Apr, 2016 to 3 Nov, 2017. Over the last 2 years 11 months and 9 days, INFY underperformed the SP500 index on 47% days. Which indicates that on days INFY underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months INFY was mostly loss making and delivered on average -0.06% per day. It's best return during this period (of +6.36%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -4.11%) was on Wednesday, 17 Oct, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +8.55%) started on 23 Nov, 2018 and went on till 28 Nov, 2018 while the bearish trend (which returned -5.25%) started on 8 Oct, 2018 and went on till 11 Oct, 2018.

During the last year INFY had 9 profitable months and 3 loss making months. INFY returned profits in more months than SP500 index. INFY significantly outperformed SP500 index in Jan 2018, when it returned +10.56% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. INFY and SP500 index, both had periods of 6 consecutive profitable months.

Empty pockets never held anyone back. Only empty heads and empty hearts can do that.
-- Norman Vincent Peale

INFY is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in INFY's volatility from 2 Oct, 2018 to 18 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

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

SP500 index has more chance of extreme outcomes than INFY. Therefore, SP500 must receive a lower allocation than INFY in your portfolio. SP500 index usually has shorter drawdown period than INFY.

On a general note (since you are interested in INFY), three small cap instruments that deserve special mention are ZBRA, HQY and EHC. They have all outperformed the market and must be closely watched for investment opportunities.

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