Want to invest in CVX? Avoid as it is a falling knife that can bleed you if you catch it

CHEVRON CORP is a falling knife that can bleed you if you catch it today. It returned -2.41% to close at 109.74. It's recent 5 day performance has been -1.21%, -1.82%, +0.28%, +0.13% and +0.46%.

[Themes containing CVX]

CVX showed a down trend over the last 3 months. During this period CVX returned -8.18% and saw a maximum drawdown of -14.11%. There were 2 short signals during this period that returned a cumulative of +4.22% to investors.

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Monthly Performance

Alpha (outperformance)

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Return distribution

CVX has been underperforming the SP500 index in recent time, after having outperformed till 22 Dec, 2016. Over the last 2 years 11 months and 14 days, CVX underperformed the SP500 index on 47% days. Which indicates that on days CVX underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months CVX delivered profits on 52% days. However, it still managed to end this period in a loss. It's best return during this period (of +3.67%) was on Monday, 5 Nov, 2018. While it's worst loss in the same period (of -3.4%) was on Thursday, 11 Oct, 2018. There was initially a bearish trend during this period which started on 10 Oct, 2018 and went on till 15 Oct, 2018. The trend delivered -7.99% losses to investors. This was followed by a bullish trend that started on 26 Nov, 2018 and ended on 3 Dec, 2018. This bullish trend delivered +6.08% to investors.

On monthly basis, CVX delivered profits and losses in equal number of months. CVX delivered profits less regularly than SP500 index. CVX significantly outperformed SP500 index in Apr 2018, when it returned +11.47% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CVX had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year.

Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.
-- Johann Wolfgang von Goethe

CVX is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in CVX's volatility from 5 Oct, 2018 to 10 Dec, 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 CVX has significant positive skewness in it's return distribution. This indicates that investors can expect CVX to recover from drawdowns quickly. Which makes CVX a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in CVX derivatives at this moment can consider 'Bear Put Spread' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in CVX), if you are evaluating CVX as an investment candidate, then you should read about PBBI which has delivered similar performance and can help diversify your portfolio.