238.0 -11.99 (-5.04%) Sell

ADBE is a falling knife, continues to bleed every investor trying to catch it

13 min read

ADOBE INC. is a falling knife that can bleed you if you catch it today. It returned -5.04% to close at 238.0. During the last week it returned -5.14% and saw a maximum drawdown of -6.76% before bouncing back.

[Themes containing ADBE]

ADBE is currently in a down trend. The current bearish signal has generated a profit of +6.55% for investors in the last three months.


ADBE has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 3 days, ADBE outperformed the SP500 index on 58% days.

ADBE was profitable on 50% days in the last three months. During this time, it delivered on average -0.13% per day. It delivered it's best daily return of +9.52%, during this period, on Tuesday, 16 Oct, 2018. There was initially a bullish trend during this period which started on 24 Sep, 2018 and went on till 1 Oct, 2018. The bullish trend returned +5.49% to investors. This was followed by a bearish trend that started on 2 Oct, 2018 and ended on 10 Oct, 2018. This bearish trend lost -14.2% of investor capital.

On monthly basis, ADBE delivered profits in more months over the last year, than losses. ADBE delivered profits in more months than SP500 index. ADBE significantly outperformed SP500 index in May 2018, when it returned +12.49% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ADBE had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

Your investment belongs to the market and your profits belong to you.
-- Vijay Kedia

ADBE 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 ADBE's volatility from 3 Oct, 2018 to 29 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ADBE has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

Investors trading in ADBE derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than ADBE. Therefore, SP500 must receive a lower allocation than ADBE in your portfolio. SP500 index usually has shorter drawdown period than ADBE.

On a general note (since you are interested in ADBE), three instruments that deserve special mention are I, ECYT and NIHD. They have all outperformed the market and must be closely watched for investment opportunities.

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