HIMX does a dead cat bounce, it's still too early to buy into it
07 Dec, 201813 min read
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HIMAX TECHNOLOGIES, INC. (Foreign) was among the best performers today. It returned +1.63% to close at 3.74. It's recent 5 day performance has been -5.88%, -4.4%, -1.92%, +1.46% and +1.99%.
HIMX is currently in a down trend. The current bearish signal has generated a profit of +40.45% for investors in the last three months.
HIMX has been underperforming the SP500 index in recent time, after having outperformed till 29 Mar, 2016. Over the last 2 years 11 months and 3 days, HIMX underperformed the SP500 index on 49% days. Which indicates that on days HIMX underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months HIMX was mostly loss making and delivered on average -0.76% per day. It's best return during this period (of +6.82%) was on Wednesday, 3 Oct, 2018. While it's worst loss in the same period (of -11.07%) was on Thursday, 8 Nov, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 26 Sep, 2018. The trend delivered -8.51% losses to investors. This was followed by a bullish trend that started on 12 Oct, 2018 and ended on 18 Oct, 2018. This bullish trend delivered +7.16% to investors.
HIMX had 3 profitable and 9 loss making months over the last year. During the last year, HIMX underperformed SP500 index on monthly return basis. HIMX was also a more risky investment than SP500 index as it's worst month in the last year, Mar 2018, returned -24.6% compared to -7.28% returned by SP500 index in Oct 2018. HIMX had a longer winning streak of losing months than SP500 index. It went down in 6 straight months (from Jul 2018 to Dec 2018) during which period it delivered -68.09%.
Don't always trust what you see. In a bull market even a duck looks like a swan.
-- Vijay Kedia
HIMX 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 HIMX's volatility from 20 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that HIMX 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.
Investors trading in HIMX derivatives at this moment can consider 'Bear Put Spread' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than HIMX. Therefore, SP500 must receive a lower allocation than HIMX in your portfolio. SP500 index usually has shorter drawdown period than HIMX.
On a general note (since you are interested in HIMX), two instruments that have delivered similar performance as HIMX are BCLI and IVC. They are suitable as good alternative investment candidates that can diversify your portfolio.
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