ABB LTD (FOREIGN)

19.41 +0.32 (+1.62%) Sell

ABB does a dead cat bounce, it's still too early to buy into it

13 min read

ABB was among the best performers today. On a longer term basis, investors in ABB LTD (Foreign) made 0.0% per day. Tuesday's performance of +1.62% was a significant outperformance compared to it's daily average.

[Themes containing ABB]

Buy-and-Hold investors in ABB experienced a maximum drawdown of -22.49% over the last three months. It returned -19.46% during this strong down 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 +11.74%.

Trend

ABB has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 14 days, ABB underperformed the SP500 index on 47% days. Which indicates that on days ABB underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ABB was mostly loss making and delivered on average -0.33% per day. It's best return during this period (of +4.66%) was on Wednesday, 12 Dec, 2018. While it's worst loss in the same period (of -4.28%) was on Wednesday, 24 Oct, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 2 Oct, 2018. The trend delivered -4.79% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 2 Nov, 2018. This bullish trend delivered +5.76% to investors.

On monthly basis, ABB delivered losses in more months over the last year, than profits. ABB delivered profits less regularly than SP500 index. ABB was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -14.35% compared to -7.75% returned by SP500 index in Dec 2018. ABB had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Feb 2018 to Jun 2018) during which period it delivered -22.43%. It is interesting to note that both ABB and SP500 index significantly outperform during months when quarterly/annual results are announced.

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

ABB is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in ABB's volatility from 19 Sep, 2018 to 30 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 ABB has significant positive skewness in it's return distribution. This indicates that investors can expect ABB to recover from drawdowns quickly. Which makes ABB 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 ABB. Therefore, SP500 must receive a lower allocation than ABB in your portfolio. ABB usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in ABB), ABMD is a mid cap that deserves to be closely tracked for investment opportunities.

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