98.47 -1.02 (-1.04%) Buy

ATO investors herd to book profits while the going is good

13 min read

ATMOS ENERGY CORP delivered massive losses on Friday. It fell by -1.04% to close at 98.47. It is currently trading +26% above it's 52 week low of 78.03 and is down only -1% from it's 52 week high.

[Themes containing ATO]

ATO showed a bullish trend over the last 3 months. During this period ATO surged by +3.9% and saw a maximum drawdown of -5.93%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ATO till volatility reduces and a clear trend emerges.


ATO has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 12 Jan, 2018 to 14 Dec, 2018. One must note that ATO is currently at it's peak outperformance to the SP500 index which makes it a good investment candidate. Over the last 2 years 11 months and 10 days, ATO outperformed the SP500 index on 54% days.

ATO was profitable on 50% days in the last three months. During this time, it delivered on average +0.07% per day. It delivered it's worst daily return of -4.28%, during this period, on Thursday, 29 Nov, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +3.02%) started on 14 Nov, 2018 and went on till 19 Nov, 2018 while the bearish trend (which returned -4.53%) started on 9 Oct, 2018 and went on till 12 Oct, 2018.

During the last year ATO had 10 profitable months and 2 loss making months. ATO returned profits in more months than SP500 index. ATO significantly outperformed SP500 index in Apr 2018, when it returned +4.88% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ATO had a longer winning streak of profitable months than SP500 index. It went up in 10 straight months (from Mar 2018 to Dec 2018) during which period it delivered +23.22%.

"You don't want to have so much money going toward your mortgage every month that you can't enjoy life or take care of your other financial responsibilities.

ATO is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in ATO's volatility from 17 Sep, 2018 to 8 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ATO has significant positive skewness in it's return distribution. This indicates that investors can expect ATO to recover from drawdowns quickly. Which makes ATO a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ATO you may find it interesting to know that PTC and AAXN are both small caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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