Below is Wipro Limited from 2002 to 2023 applying the Price Momentum Indicator.
Wipro Price Momentum is at a compelling level since it has come off of a dramatic decline and has subsequently started to reverse the declining trend. Below we have indicated the price and the dates at which Wipro was at the same level in the Price Momentum Indicator.
Wipro’s dates at the same level have average annual gains of +128% if held for a minimum of five years. However, you should expect half that number (+64% or less) going forward.
We’ve noted with special emphasis the two points which highlight the downside risk. Those dates are January 23, 2002 and January 18, 2008. These dates stand out because downside risk is all that matters when investing.
The average downside risk of those two dates has been -28% if held for a year with the largest decline being -51%. This means that if you’re unwilling to accept a decline of between -30% and -50% or hold for a minimum of 5 years then this is not the stock for you.
Important Notes:
-
Our work is not intended to be time sensitive.
-
The primary objective is to avoid buying the top.
-
Our postings are your starting point and in no way the end point for your research.
-
We aren’t aiming to be exactly right, instead, our goal is to be generally close.
-
Your concentration should be on the Price Momentum Indicator, the price of the stock is a secondary, although important, consideration.
-
The Price Momentum Indicator is not meant to indicate tops in a stock.
-
Observe with us before taking any action if you’re unfamiliar with our work.