HPQ is a falling knife, continues to bleed every investor trying to catch it
18 Dec, 201813 min read
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HP INC delivered massive losses on Tuesday. It lost -0.05% to close at 21.41. It is currently trading -18% below it's 52 week high of 26.42.
HPQ is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +6.79% for investors.
HPQ has been underperforming the SP500 index in recent time, after having outperformed till 4 Oct, 2018. Over the last 2 years 11 months and 14 days, HPQ outperformed the SP500 index on 53% days.
HPQ returned losses on 58% days in the last three months. During this time, it delivered on average -0.24% per day. It delivered it's worst daily return of -5.15%, during this period, on Thursday, 11 Oct, 2018. There was initially a bearish trend during this period which started on 5 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -13.54% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 8 Nov, 2018. This bullish trend delivered +10.33% to investors.
HPQ had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of HPQ and SP500 index were the same. HPQ significantly outperformed SP500 index in Jan 2018, when it returned +9.38% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. HPQ and SP500 index, both had periods of 6 consecutive profitable months.
Never invest emergency savings in the stock market.
-- Suze Orman
HPQ 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 HPQ's volatility from 19 Sep, 2018 to 7 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that HPQ has significant positive skewness in it's return distribution. This indicates that investors can expect HPQ to recover from drawdowns quickly. Which makes HPQ a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in HPQ derivatives at this moment can consider 'Bull Call Spread' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than HPQ. Therefore, SP500 must receive a lower allocation than HPQ in your portfolio. HPQ usually has shorter drawdown period than the SP500 index.
On a general note (since you are interested in HPQ), TPNL has performed really well this year and deserves to be closely tracked for investment opportunities.
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