104.55 +0.41 (+0.39%) Sell

CHKP shows sign of weakness as investors do cost averaging

13 min read

CHECK POINT SOFTWARE TECHNOLOGIES LTD (Foreign) performed better than the broader market on Tuesday. It returned +0.39% to close at 104.55. It is currently trading -13% below it's 52 week high of 120.5.

[Themes containing CHKP]

CHKP is currently in a down trend. The current bearish signal has generated a profit of +5.14% for investors in the last three months.


CHKP has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 14 days, CHKP outperformed the SP500 index on 52% days.

During the last three months CHKP was mostly loss making and delivered on average -0.18% per day. It's best return during this period (of +3.49%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -4.26%) was on Wednesday, 24 Oct, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 10 Oct, 2018. The trend delivered -5.64% losses to investors. This was followed by a bullish trend that started on 13 Nov, 2018 and ended on 16 Nov, 2018. This bullish trend delivered +3.18% to investors.

CHKP had 7 profitable and 5 loss making months over the last year. During the last year, CHKP underperformed SP500 index on monthly return basis. CHKP significantly outperformed SP500 index in Jul 2018, when it returned +13.42% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CHKP had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

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

CHKP 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 CHKP's volatility from 1 Oct, 2018 to 29 Oct, 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 CHKP has significant positive skewness in it's return distribution. This indicates that investors can expect CHKP to recover from drawdowns quickly. Which makes CHKP 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 CHKP. Therefore, SP500 must receive a lower allocation than CHKP in your portfolio. SP500 index usually has shorter drawdown period than CHKP.

On a general note (since you are interested in CHKP), three instruments that deserve special mention are ECYT, PRQR and TNDM. They have all outperformed the market and must be closely watched for investment opportunities.

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