Don't lose faith in AAPL now, it delivered good returns
18 Dec, 201813 min read
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APPLE INC was among the best performers today. It returned +1.3% to close at 166.07. It's recent 5 day performance has been -0.93%, -3.2%, +1.09%, +0.28% and -0.57%.
AAPL showed a strong down trend over the last 3 months. During this period AAPL lost -23.95% and saw a maximum drawdown of -29.36%. There was a short signal during this period which returned +23.24%.
AAPL has been underperforming the SP500 index in recent time, after having outperformed till 23 Oct, 2018. Over the last 2 years 11 months and 14 days, AAPL outperformed the SP500 index on 52% days.
During the last three months AAPL was mostly loss making and delivered on average -0.41% per day. It's best return during this period (of +3.85%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -6.63%) was on Friday, 2 Nov, 2018. There was initially a bullish trend during this period which started on 27 Sep, 2018 and went on till 3 Oct, 2018. The bullish trend returned +5.19% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -11.49% of investor capital.
AAPL had 4 profitable and 8 loss making months over the last year. During the last year, AAPL underperformed SP500 index on monthly return basis. AAPL significantly outperformed SP500 index in Aug 2018, when it returned +19.62% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. AAPL had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -29.94%.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.
AAPL is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in AAPL's volatility from 1 Oct, 2018 to 29 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that AAPL has significant positive skewness in it's return distribution. This indicates that investors can expect AAPL to recover from drawdowns quickly. Which makes AAPL a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in AAPL derivatives at this moment can consider 'Long Straddle' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than AAPL. Therefore, SP500 must receive a lower allocation than AAPL in your portfolio. SP500 index usually has shorter drawdown period than AAPL.
On a general note (since you are interested in AAPL), three instruments that deserve special mention are AYTU, RGSE and NSPR. They have all outperformed the market and must be closely watched for investment opportunities.
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