6.36 +0.1 (+1.6%) Sell

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

13 min read

CYPRESS ENERGY PARTNERS, L.P. delivered good returns on Friday. It grew by +1.6% to close at 6.36. On a day when the overall market breadth was 35%, it closed higher than 89% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing CELP]

CELP showed a strong down trend over the last 3 months. During this period CELP lost -14.05% and saw a maximum drawdown of -26.93%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in CELP till volatility reduces and a clear trend emerges.


CELP has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, CELP underperformed the SP500 index on 51% days.

During the last three months CELP was mostly loss making and delivered on average -0.13% per day. It's best return during this period (of +14.49%) was on Tuesday, 13 Nov, 2018. While it's worst loss in the same period (of -16.07%) was on Monday, 12 Nov, 2018. There was initially a bullish trend during this period which started on 26 Oct, 2018 and went on till 31 Oct, 2018. The bullish trend returned +15.94% to investors. This was followed by a bearish trend that started on 6 Nov, 2018 and ended on 12 Nov, 2018. This bearish trend lost -25.52% of investor capital.

CELP had 7 profitable and 5 loss making months over the last year. During the last year, CELP underperformed SP500 index on monthly return basis. CELP significantly outperformed SP500 index in Jan 2018, when it returned +21.65% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CELP 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 CELP and SP500 index significantly outperform during months when quarterly/annual results are announced.

Courage is being scared to death, but saddling up anyway.
-- John Wayne

CELP 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 CELP'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 CELP has significant positive skewness in it's return distribution. This indicates that investors can expect CELP to recover from drawdowns quickly. Which makes CELP 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 CELP. Therefore, SP500 must receive a lower allocation than CELP in your portfolio. SP500 index usually has shorter drawdown period than CELP.

On a general note (since you are interested in CELP), three small cap instruments that deserve special mention are KEYS, AAXN and ZBRA. They have all outperformed the market and must be closely watched for investment opportunities.

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