21.22 -0.39 (-1.85%) Sell

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

13 min read

BAKER HUGHES A GE CO was among the worst performers today. It returned -1.85% to close at 21.22. It's recent 5 day performance has been +0.79%, -2.63%, +2.13%, +1.32% and +0.09%.

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BHGE showed a strong down trend over the last 3 months. During this period BHGE returned -35.44% and saw a maximum drawdown of -37.27%. There were 2 short signals during this period that returned a cumulative of +33.66% to investors.


BHGE has been outperforming the SP500 index in recent time. Over the last 1 year 5 months and 13 days, BHGE underperformed the SP500 index on 49% days. Which indicates that on days BHGE underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months BHGE was mostly loss making and delivered on average -0.67% per day. It's best return during this period (of +2.99%) was on Monday, 5 Nov, 2018. While it's worst loss in the same period (of -7.33%) was on Monday, 12 Nov, 2018. There was initially a bullish trend during this period which started on 25 Sep, 2018 and went on till 28 Sep, 2018. The bullish trend returned +3.0% to investors. This was followed by a bearish trend that started on 7 Nov, 2018 and ended on 12 Nov, 2018. This bearish trend lost -13.49% of investor capital.

On monthly basis, BHGE delivered losses in more months over the last year, than profits. BHGE delivered profits less regularly than SP500 index. BHGE significantly outperformed SP500 index in Apr 2018, when it returned +30.03% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. BHGE 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 -40.58%. It is interesting to note that both BHGE and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Watch your finances like a hawk.

BHGE is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in BHGE's volatility from 17 Oct, 2018 to 12 Nov, 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 BHGE has positive skewness in it's return distribution. This indicates that investors can expect BHGE to make attempts to recover from drawdowns quickly. Which makes BHGE a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

On a general note (since you are interested in BHGE), two instruments that deserve special mention are DFBG and HEAR. They have significantly outperformed the overall market this year.

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