1.05 +0.01 (+0.96%) Sell

ECR investors update their stop-losses higher

13 min read

ECLIPSE RESOURCES CORP delivered good returns on Tuesday. It grew by +0.96% to close at 1.05. On a day when the overall market breadth was 35%, it closed higher than 93% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.

[Themes containing ECR]

Buy-and-Hold investors in ECR experienced a maximum drawdown of -27.34% over the last three months. It returned -14.63% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals.


ECR has been underperforming the SP500 index in recent time, after having outperformed till 23 Jun, 2016. Over the last 2 years 11 months and 7 days, ECR underperformed the SP500 index on 53% days.

During the last three months ECR was mostly loss making and delivered on average -0.15% per day. It's best return during this period (of +12.1%) was on Wednesday, 3 Oct, 2018. While it's worst loss in the same period (of -9.01%) was on Monday, 29 Oct, 2018. There was initially a bullish trend during this period which started on 9 Nov, 2018 and went on till 14 Nov, 2018. The bullish trend returned +6.37% to investors. This was followed by a bearish trend that started on 15 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -18.57% of investor capital.

On monthly basis, ECR delivered losses in more months over the last year, than profits. ECR delivered profits less regularly than SP500 index. ECR was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -24.77% compared to -7.28% returned by SP500 index in Oct 2018. ECR had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -46.9%. It is interesting to note that both ECR and SP500 index significantly outperform during months when quarterly/annual results are announced.

"A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.

ECR 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 ECR's volatility from 14 Sep, 2018 to 19 Sep, 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 ECR has significant negative skewness in it's return distribution. This indicates that ECR is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in ECR you may find it interesting to know that TWTR and SQ are both mid caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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