19.01 +0.08 (+0.42%) Sell

HOLI investors update their stop-losses higher

13 min read

HOLLYSYS AUTOMATION TECHNOLOGIES, LTD. (Foreign) managed to outperform the broader market today. It surged by +0.42% to close at 19.01. During the last week it delivered -6.81% and saw a maximum drawdown of -7.21% before bouncing back.

[Themes containing HOLI]

Buy-and-Hold investors in HOLI experienced a maximum drawdown of -15.16% over the last three months. It delivered -7.04% during this bearish trending period. There were no long signals during this period, where the short signal generated good profits of +7.04% for investors.


HOLI has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 4 Jan, 2016 to 7 Nov, 2018. Over the last 2 years 11 months and 7 days, HOLI underperformed the SP500 index on 49% days. Which indicates that on days HOLI underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

HOLI returned losses on 54% days in the last three months. During this time, it delivered on average -0.09% per day. It delivered it's best daily return of +5.88%, during this period, on Wednesday, 14 Nov, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +6.06%) started on 12 Oct, 2018 and went on till 18 Oct, 2018 while the bearish trend (which returned -7.46%) started on 1 Oct, 2018 and went on till 5 Oct, 2018.

The last 12 months saw HOLI's investors making profits in 5 months and incurring losses in 7 months. HOLI was less consistent in delivering monthly returs than SP500 index. HOLI significantly outperformed SP500 index in Jan 2018, when it returned +11.57% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. HOLI had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -17.46%. It is interesting to note that both HOLI and SP500 index significantly outperform during months when quarterly/annual results are announced.

It takes as much energy to wish as it does to plan.
-- Eleanor Roosevelt

HOLI is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in HOLI's volatility from 13 Sep, 2018 to 14 Nov, 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 HOLI has significant positive skewness in it's return distribution. This indicates that investors can expect HOLI to recover from drawdowns quickly. Which makes HOLI a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in HOLI), two instruments that have been extremely volatile in recent times are IX and OPNT. Investors in these instruments should consider reducing their exposure (to IX and OPNT) and diversifying their portfolios.

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