CONOCOPHILLIPS

65.91 -0.69 (-1.05%) Sell

Doubt in the minds of COP investors as it destroyed investor wealth

13 min read

CONOCOPHILLIPS delivered massive losses on Friday. It fell by -1.05% to close at 65.91. On a day when the overall market breadth was 35%, it closed higher than 18% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing COP]

COP is currently in a bearish trend. Over the last three months 2 bearish signals have generated a profit of +3.6% for investors.

Trend

COP has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 21 Jul, 2017 to 9 Oct, 2018. Over the last 2 years 11 months and 3 days, COP outperformed the SP500 index on 51% days.

COP was profitable on 55% days in the last three months. During this time, it delivered on average -0.1% per day. It delivered it's worst daily return of -5.43%, during this period, on Wednesday, 10 Oct, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 10 Sep, 2018 and went on till 19 Sep, 2018. This bullish trend returned +6.01% to investors.

During the last year COP had 8 profitable months and 4 loss making months. Profitable number of months of COP and SP500 index were the same. COP significantly outperformed SP500 index in Apr 2018, when it returned +12.76% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. COP had a longer winning streak of profitable months than SP500 index. It went up in 7 straight months (from Mar 2018 to Sep 2018) during which period it delivered +40.51%. It is interesting to note that both COP and SP500 index significantly outperform during months when quarterly/annual results are announced.

How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.
-- Robert G. Allen

COP is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in COP's volatility from 27 Sep, 2018 to 14 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that COP has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

Investors trading in COP derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

Based on your interest in COP you may find it interesting to know that I, ECYT and AMRN have all shown remarkable performance this year and deserve to be on every investor's watchlist.

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