40.86 +0.13 (+0.32%) Sell

AGX shows sign of weakness as investors do cost averaging

13 min read

ARGAN INC performed better than the broader market on Tuesday. It returned +0.32% to close at 40.86. On a day when the overall market breadth was 35%, it closed higher than 11% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.

[Themes containing AGX]

AGX showed a down trend over the last 3 months. During this period AGX lost -5.74% and saw a maximum drawdown of -13.03%. There was a short signal during this period which returned +1.38%.


AGX has been underperforming the SP500 index in recent time, after having outperformed till 25 Jan, 2017. Over the last 2 years 11 months and 7 days, AGX underperformed the SP500 index on 50% days. Which indicates that on days AGX underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months AGX delivered profits on 53% days. However, it still managed to end this period in a loss. It's best return during this period (of +4.92%) was on Thursday, 6 Dec, 2018. While it's worst loss in the same period (of -4.68%) was on Friday, 9 Nov, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 26 Sep, 2018. The trend delivered -3.45% losses to investors. This was followed by a bullish trend that started on 22 Oct, 2018 and ended on 26 Oct, 2018. This bullish trend delivered +3.88% to investors.

AGX had 5 profitable and 7 loss making months over the last year. During the last year, AGX underperformed SP500 index on monthly return basis. AGX was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -8.37% compared to -7.28% returned by SP500 index in Oct 2018. AGX had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

Money is not the only answer, but it makes a difference.
-- Barack Obama

AGX 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 AGX's volatility from 28 Sep, 2018 to 7 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that AGX 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.

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

Based on your interest in AGX you may find it interesting to know that PFE, AMZN and MSFT are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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