21.04 -0.31 (-1.45%) Sell

Don't buy JD now, it is an investor's nightmare

13 min read

JD.COM, INC. (Foreign) has destroyed investor wealth today. It lost -1.45% to close at 21.04. It's recent 5 day performance has been -3.7%, -2.38%, +3.75%, +4.69% and +1.95%.

[Themes containing JD]

JD showed a strong down trend over the last 3 months. During this period JD lost -21.84% and saw a maximum drawdown of -28.44%. There were 3 short signals during this period that returned a cumulative of +2.26% to investors.


JD has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 14 days, JD underperformed the SP500 index on 51% days.

JD returned losses on 51% days in the last three months. During this time, it delivered on average -0.32% per day. It delivered it's worst daily return of -8.42%, during this period, on Monday, 19 Nov, 2018. There was initially a bullish trend during this period which started on 25 Sep, 2018 and went on till 28 Sep, 2018. The bullish trend returned +6.32% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 10 Dec, 2018. This bearish trend lost -6.99% of investor capital.

JD had 2 profitable and 10 loss making months over the last year. During the last year, JD underperformed SP500 index on monthly return basis. JD was also a more risky investment than SP500 index as it's worst month in the last year, Sep 2018, returned -16.65% compared to -7.75% returned by SP500 index in Dec 2018. JD 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 -55.28%.

If all the economists were laid end to end, they'd never reach a conclusion.
-- George Bernard Shaw

JD 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 JD's volatility from 20 Sep, 2018 to 2 Nov, 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 JD 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 JD derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in JD), two mid cap instruments that deserve special mention are ABMD and SQ. They have significantly outperformed the overall market.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
Symbol Price {{retType}} | Tr.
{{detail.symbol}} {{detail.close}} {{detail.priceChange}}  {{detail.pctChange}}%  {{detail.name}} {{detail.trend}} 
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter