DENN does a dead cat bounce, it's still too early to buy into it
11 Dec, 201813 min read
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DENNYS CORP delivered stellar performance today. It gained +1.73% to close at 16.46. During the last week it gained +2.49% and saw a maximum drawdown of -1.53% before bouncing back.
DENN is currently in a down trend. The previous short signal in DENN has not been profitable for investors in general. If you are short on DENN at current levels please make sure that your allocation is limited and that your portfolio is well diversified.
DENN has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 7 days, DENN outperformed the SP500 index on 48% days. Which indicates that on days DENN outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.
DENN returned losses on 52% days in the last three months. During this time, it delivered on average +0.25% per day. It delivered it's best daily return of +22.61%, during this period, on Wednesday, 31 Oct, 2018. There was initially a bearish trend during this period which started on 14 Sep, 2018 and went on till 19 Sep, 2018. The trend delivered -3.96% losses to investors. This was followed by a bullish trend that started on 5 Oct, 2018 and ended on 10 Oct, 2018. This bullish trend delivered +4.06% to investors.
DENN had 7 profitable and 5 loss making months over the last year. During the last year, DENN underperformed SP500 index on monthly return basis. DENN significantly outperformed SP500 index in Oct 2018, when it returned +21.58% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. DENN had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both DENN and SP500 index significantly outperform during months when quarterly/annual results are announced.
The Stock Market is designed to transfer money from the Active to the Patient.
-- Warren Buffett
DENN 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 DENN's volatility from 18 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that DENN 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.
SP500 index has more chance of extreme outcomes than DENN. Therefore, SP500 must receive a lower allocation than DENN in your portfolio. SP500 index usually has shorter drawdown period than DENN.
Based on your interest in DENN you may find it interesting to know that TWTR, ABMD and SQ are mid caps that have all shown remarkable performance and qualify to be on every investor's watchlist.
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