31.68 -0.55 (-1.74%) Sell

E is a falling knife, continues to bleed every investor trying to catch it

13 min read

ENI SPA (Foreign) was among the worst performers on Friday. It returned -1.74% to close at 31.68. On a day when the overall market breadth was 35%, it closed higher than 14% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing E]

E is currently in a down trend. Over the last three months 3 bearish signals have generated a profit of +9.51% for investors.


E has been underperforming the SP500 index in recent time, after having outperformed till 29 Apr, 2016. Over the last 2 years 11 months and 10 days, E underperformed the SP500 index on 49% days. Which indicates that on days E underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

E returned losses on 53% days in the last three months. During this time, it delivered on average -0.26% per day. It delivered it's worst daily return of -3.97%, during this period, on Friday, 23 Nov, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +2.35% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 13 Nov, 2018. This bearish trend lost -6.48% of investor capital.

On monthly basis, E delivered profits and losses in equal number of months. E delivered profits less regularly than SP500 index. E significantly outperformed SP500 index in Apr 2018, when it returned +12.62% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. E had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -17.24%. It is interesting to note that both E and SP500 index significantly outperform during months when quarterly/annual results are announced.

"The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.

E 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 E's volatility from 25 Sep, 2018 to 29 Oct, 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 E has significant positive skewness in it's return distribution. This indicates that investors can expect E to recover from drawdowns quickly. Which makes E a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in E), two instruments that deserve special mention are SBOT and AYTU. They have significantly outperformed the overall market.

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