Looking to invest in ADSK? Look for alternatives because it showed weakness
07 Dec, 201813 min read
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AUTODESK INC showed weakness on Friday. It fell by 0.0% to close at 132.57. It is currently trading +27% above it's 52 week low of 103.8 and is down only -15% from it's 52 week high.
ADSK showed a strong bearish trend over the last 3 months. During this period ADSK fell by -12.06% and saw a maximum drawdown of -21.18%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ADSK till volatility reduces and a clear trend emerges.
ADSK has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 9 Feb, 2016 to 24 Aug, 2018. Over the last 2 years 11 months and 3 days, ADSK outperformed the SP500 index on 54% days.
ADSK returned losses on 54% days in the last three months. During this time, it delivered on average -0.16% per day. It delivered it's best daily return of +9.74%, during this period, on Wednesday, 21 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -16.47% of investor capital.
During the last year ADSK had 9 profitable months and 3 loss making months. ADSK returned profits in more months than SP500 index. ADSK significantly outperformed SP500 index in Aug 2018, when it returned +20.17% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ADSK and SP500 index, both had periods of 6 consecutive profitable months.
"Based on my own personal experience - both as an investor in recent years and an expert witness in years past - rarely do more than three or four variables really count. Everything else is noise.
ADSK is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in ADSK's volatility from 11 Sep, 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 ADSK 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 ADSK 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 ADSK. Therefore, SP500 must receive a lower allocation than ADSK in your portfolio. SP500 index usually has shorter drawdown period than ADSK.
Based on your interest in ADSK you may find it interesting to know that I has shown remarkable performance this year and deserves to be on every investors' watchlist.
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