Archive for June 1st, 2012

Which Indian staple is in the long 30?

There are a few consumer good and discretionary components in the INDIA 30. X is one of them. Despite it’s heavy weight character how could X make it to the long 30 list? A few reasons.

First, X is still in the lower 50% of the performance rankings.
Second, While other components rose from 2002 to 2006, the stock was underperforming.
Third, underperformers or worst outliers tend to outperform cyclically.
Fourth, Jiseki is still positive.
Fifth, Staples poorly correlate to the key economic sectors and outperform in negative markets.
Fifth, the technical picture has no negative price confirmation yet.
Sixth, Relative performance has turned positive vs. Nifty (illustrated below)

The latest ALPHA looks at 3 consumption plays including component X.

Avinash Barnwal is Master of Science in Statistics and Informatics from IIT Kharagpur. He has worked on human response time at Department of Psychology, University of Amsterdam.  Avinash is a Quantitative Analyst at Orpheus developing money management solutions and building statistical models to address temporal challenges.