106.74 +1.54 (+1.44%) Sell

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

13 min read

INTERCEPT PHARMACEUTICALS, INC. delivered good returns on Tuesday. It grew by +1.44% to close at 106.74. It is currently trading +102% above it's 52 week low of 52.72 and is down only -16% from it's 52 week high.

ICPT is currently in a down trend. The current bearish signal has generated a profit of +1.25% for investors in the last three months.


ICPT has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 14 days, ICPT underperformed the SP500 index on 50% days. Which indicates that on days ICPT underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ICPT was mostly loss making and delivered on average -0.11% per day. It's best return during this period (of +10.26%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -7.57%) was on Thursday, 4 Oct, 2018. There was initially a bearish trend during this period which started on 8 Nov, 2018 and went on till 14 Nov, 2018. The trend delivered -16.57% losses to investors. This was followed by a bullish trend that started on 15 Nov, 2018 and ended on 26 Nov, 2018. This bullish trend delivered +14.39% to investors.

On monthly basis, ICPT delivered profits in more months over the last year, than losses. ICPT delivered profits in more months than SP500 index. ICPT was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -24.08% compared to -7.75% returned by SP500 index in Dec 2018. ICPT had a longer winning streak of profitable months than SP500 index. It went up in 7 straight months (from Mar 2018 to Sep 2018) during which period it delivered +77.53%.

I believe in capitalism for everybody, not necessarily high finance but capitalism that works for the working men and women of this country who are out there paddling alone in America right now.
-- Rick Santorum

ICPT is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in ICPT's volatility from 20 Sep, 2018 to 24 Oct, 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 ICPT has significant negative skewness in it's return distribution. This indicates that ICPT is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in ICPT derivatives at this moment can consider 'Long Straddle' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in ICPT), if you are evaluating ICPT as an investment candidate, then you should read about BLFS which has delivered similar performance and can help diversify your portfolio.

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