Don't cash in on AMZN now, it outperformed most of it's peers
24 Sep, 201813 min read
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AMAZON COM INC outperformed the broader market on Monday. It increased by +1.01% to close at 1934.36. It is currently trading +103% above it's 52 week low of 950.87 and is down only -5% from it's 52 week high.
AMZN showed a strong bullish trend over the last 3 months. During this period AMZN increased by +16.31% and saw a maximum drawdown of -6.45%. There was a long signal during this period which returned +16.31%.
AMZN has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 9 Feb, 2016 to 4 Sep, 2018. Over the last 2 years and 9 months, AMZN outperformed the SP500 index on 55% days.
During the last three months AMZN was mostly profitable and delivered on average +0.25% per day. It's best return during this period (of +3.38%) was on Wednesday, 29 Aug, 2018. While it's worst loss in the same period (of -3.16%) was on Monday, 17 Sep, 2018. The longest stort-term trend during this period was 9 profitable days, which started on 5 Jul, 2018 and went on till 17 Jul, 2018. This bullish trend returned +8.54% to investors.
The last 12 months saw AMZN's investors making profits in 9 months and incurring losses in 3 months. AMZN was less consistent in delivering monthly returs than SP500 index. AMZN significantly outperformed SP500 index in Jan 2018, when it returned +22.09% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. AMZN had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both AMZN and SP500 index significantly outperform during months when quarterly/annual results are announced.
Financial peace isn't the acquisition of stuff. It's learning to live on less than you make, so you can give money back and have money to invest. You can't win until you do this.
-- Dave Ramsey
AMZN is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing decrease in volatility. During the last three months, there was a significant fall in AMZN's volatility from 25 Jun, 2018 to 28 Aug, 2018. While there was a significant fall in the SP500 index's volatility from 25 Jun, 2018 to 28 Aug, 2018.
Advanced/professional short-term investors should note that AMZN 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 AMZN 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 AMZN. Therefore, SP500 must receive a lower allocation than AMZN in your portfolio. SP500 index usually has shorter drawdown period than AMZN.
On a general note (since you are interested in AMZN), if you are an investor in NVCN, you need to be extra careful (consider limiting your exposure or diversifying) as it is extremely unpredictable and therefore risky.
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