34.39 +0.4 (+1.18%) Sell

BOFI does a dead cat bounce, it's still too early to buy into it

13 min read

AXOS FINANCIAL, INC. outperformed the broader market on Friday. It increased by +1.18% to close at 34.39. It is currently trading -22% below it's 52 week high of 44.65.

[Themes containing BOFI]

BOFI showed a bearish trend over the last 3 months. During this period BOFI delivered -3.94% and saw a maximum drawdown of -7.13%. There was a short signal during this period which returned +3.94%.


BOFI has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 2 Aug, 2016 to 6 Jun, 2018. Over the last 2 years and 9 months, BOFI outperformed the SP500 index on 53% days.

During the last three months BOFI was mostly loss making and delivered on average -0.39% per day. It's best return during this period (of +2.75%) was on Wednesday, 19 Sep, 2018. While it's worst loss in the same period (of -2.58%) was on Thursday, 27 Sep, 2018. The longest stort-term trend during this period was 3 losing days, which started on 20 Sep, 2018 and ended on 24 Sep, 2018. This bearish trend lost -3.08% of investor capital.

The last 12 months saw BOFI's investors making profits in 5 months and incurring losses in 7 months. BOFI was less consistent in delivering monthly returs than SP500 index. BOFI significantly outperformed SP500 index in Jan 2018, when it returned +19.11% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. BOFI 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 BOFI and SP500 index significantly outperform during months when quarterly/annual results are announced.

Never spend your money before you have it.
-- Thomas Jefferson

BOFI is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing decrease in volatility. During the last three months, there was a significant fall in BOFI's volatility from 17 Sep, 2018 to 25 Sep, 2018. While there was a significant fall in the SP500 index's volatility from 18 Sep, 2018 to 25 Sep, 2018.

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

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

On a general note (since you are interested in BOFI), three large cap instruments that deserve special mention are MSFT, CSCO and V. They have all outperformed the market and must be closely watched for investment opportunities.

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