ENPHASE ENERGY, INC.

5.7 +0.02 (+0.35%) Buy

Profit booking on the minds of ENPH investors as it shows marginal outperformance

13 min read

ENPHASE ENERGY, INC. performed better than the broader market on Tuesday. It returned +0.35% to close at 5.7. On a day when the overall market breadth was 35%, it closed higher than 84% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.

[Themes containing ENPH]

Buy-and-Hold investors in ENPH experienced a maximum drawdown of -16.83% over the last three months. It returned +39.02% during this strong up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.

Trend

ENPH has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 7 days, ENPH outperformed the SP500 index on 48% days. Which indicates that on days ENPH outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months ENPH delivered losses on 54% days. However, it still managed to end this period in a profit. It's best return during this period (of +12.08%) was on Tuesday, 18 Sep, 2018. While it's worst loss in the same period (of -7.17%) was on Tuesday, 20 Nov, 2018. There was initially a bearish trend during this period which started on 18 Oct, 2018 and went on till 24 Oct, 2018. The trend delivered -14.11% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 5 Nov, 2018. This bullish trend delivered +26.95% to investors.

On monthly basis, ENPH delivered profits and losses in equal number of months. ENPH delivered profits less regularly than SP500 index. ENPH significantly outperformed SP500 index in Feb 2018, when it returned +50.91% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ENPH had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Jul 2018 to Oct 2018) during which period it delivered -43.78%.

Trading mastery is a state of complete acceptance of probability, not a state of fight it.
-- Yvan Byeajee

ENPH 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 fall in ENPH's volatility from 13 Sep, 2018 to 3 Dec, 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 ENPH 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 ENPH. Therefore, SP500 must receive a lower allocation than ENPH in your portfolio. SP500 index usually has shorter drawdown period than ENPH.

Based on your interest in ENPH you may find it interesting to know that IX is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to IX or sufficiently diversifying your portfolio.

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