105.99 -3.43 (-3.23%) Sell

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

13 min read

ALEXION PHARMACEUTICALS, INC. has destroyed investor wealth on Tuesday. It fell by -3.23% to close at 105.99. On a day when the overall market breadth was 34%, it closed higher than 67% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Themes containing ALXN]

ALXN showed a strong bearish trend over the last 3 months. During this period ALXN fell by -13.1% and saw a maximum drawdown of -23.75%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ALXN till volatility reduces and a clear trend emerges.


ALXN has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 6 Jan, 2016 to 14 Sep, 2018. Over the last 2 years 11 months and 14 days, ALXN underperformed the SP500 index on 50% days. Which indicates that on days ALXN underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ALXN was mostly loss making and delivered on average -0.18% per day. It's best return during this period (of +6.81%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -9.76%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 1 Nov, 2018 and went on till 8 Nov, 2018. This bullish trend returned +12.96% to investors.

During the last year ALXN had 5 profitable months and 7 loss making months. ALXN returned profits in fewer months than SP500 index. ALXN was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -18.27% compared to -7.75% returned by SP500 index in Dec 2018. ALXN had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -10.48%. It is interesting to note that both ALXN and SP500 index significantly outperform during months when quarterly/annual results are announced.

When you stop chasing the wrong things you give the right things a chance to catch you.
-- Lolly Daskal

ALXN 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 ALXN's volatility from 20 Sep, 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 ALXN has significant negative skewness in it's return distribution. This indicates that ALXN is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in ALXN derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

Based on your interest in ALXN you may find it interesting to know that NSPR has shown remarkable performance and deserves to be on every investors' watchlist.

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