31.3 -0.03 (-0.1%) Sell

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

13 min read

APACHE CORP ranked among the worst performers on Thursday. It returned -0.1% to close at 31.3. It is currently trading -36% below it's 52 week high of 49.3.

[Themes containing APA]

APA showed a strong down trend over the last 3 months. During this period APA returned -31.15% and saw a maximum drawdown of -37.99%. There was a short signal during this period which returned +30.64%.


APA has been underperforming the SP500 index in recent time, after having outperformed till 5 Dec, 2016. Over the last 2 years 11 months and 9 days, APA underperformed the SP500 index on 52% days.

During the last three months APA was mostly loss making and delivered on average -0.56% per day. It's best return during this period (of +4.56%) was on Monday, 5 Nov, 2018. While it's worst loss in the same period (of -5.88%) was on Wednesday, 10 Oct, 2018. There was initially a bullish trend during this period which started on 27 Sep, 2018 and went on till 3 Oct, 2018. The bullish trend returned +3.45% to investors. This was followed by a bearish trend that started on 15 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -17.0% of investor capital.

On monthly basis, APA delivered profits and losses in equal number of months. APA delivered profits less regularly than SP500 index. APA was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -23.89% compared to -7.28% returned by SP500 index in Oct 2018. APA had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -39.81%. It is interesting to note that both APA and SP500 index significantly outperform during months when quarterly/annual results are announced.

"A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.

APA 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 APA's volatility from 3 Oct, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that APA 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 APA derivatives at this moment can consider 'Calendar Spread' options strategy to receive better risk-adjusted returns.

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

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

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