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When Nifty closed in Red on Friday (8th Nov 2013), it was the 37th occasion that we have seen Nifty Current Month running futures close in negative for the 5th day running. The chart below (which is plotted on Log Scale) shows the occasions of number of Winning / Losing streaks. 1 means that the Win / Loss was just one day before it turned around.
The chart below displays the returns of BSE Sensex vs. S&P 500 of US since 1981 till date (November 7). What is interesting is that since 2003, we have outperformed S&P 500 on every positive occasion and under-performed S&P 500 whenever the year ended in negative territory. I have used the Open and Close to determine the returns. 2013 seems to be the first occasion when S&P is strongly performing on the positive side compared to the Sensex since the start of the secular world wide bull market of 2003.
Sorry for the tongue in cheek name for the post, but then again, what can explain such a wide difference for choosing the wrong brand 😉
Since the time of listing of Lovable lingerie, the stock has returned a measly 30% return vs. the 215% growth seen in Page (Jockey).
The intra-day volatility in Nifty has considerably reduced since the insane volatility we saw in 2008. But is this the calm before the storm?
Above pic shows the ATR of 14 days on Hourly data of Nifty Futures.
CNX Realty has been one of the worst performing indices over multiple time frames since its peak in 2008 (January). While it has moved more than 18% from the low, it still trades well below 10% of its all time high.
In recent times, there has been a plethora of reports on how the sales of real estate has dropped resulting in many developers holding onto their apartment / office complexes at great cost rather than reduce the price and take a hit.
On the charts though, we seem to be seeing multiple signs of a bottom in process. As with everything else, trying to buy a beaten down sector / stock is fraught with higher risks than betting on those that are already in a good bullish phase.
Here is the CNX Realty chart
Since CNX Realty index cannot be traded (bought into), the next best way is to trade the best stocks in that sector. Here is a Relative Strength comparison of the constituents of those stocks that form part of the CNX Realty Index
As can be seen in the chart above, the best stocks are Phoenix Industries / IB Real and Prestige. Of course, as with all things in market, there is no guarantee that these stocks will return a better risk adjusted return compared to say the worst performer – HDIL. But when betting on already weak sector, its better to be with the stronger ones than the weaker ones.
Returns generated by various NSE Indices – Broad, Sector and Thematic
With Nifty rising by nearly 23% from the low registered in late August, the question on top of the mind is whether markets are way over-valued compared to historical values.
One way to measure valuation is by PE and here I have plotted the CNX Nifty PE since 2000 with Standard Deviations (1,2) on either side. As on date, we are still at average valuations suggesting that while markets are not expensive, they aren’t cheap either.
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