24.65 +2.12 (+8.59%) Sell

KEQU does a dead cat bounce, it's still too early to buy into it

13 min read

KEWAUNEE SCIENTIFIC CORP was among the best performers on Wednesday. It returned +8.59% to close at 24.65. On a day when the overall market breadth was 35%, it closed higher than 77% of the market. In comparison, the benchmark SP500 index closed today at +0.54%.

[Themes containing KEQU]

KEQU is currently in a down trend. The current bearish signal has generated a profit of +26.64% for investors in the last three months.


KEQU has been underperforming the SP500 index in recent time, after having outperformed till 26 Jun, 2018. Over the last 2 years 11 months and 8 days, KEQU outperformed the SP500 index on 50% days. Which indicates that on days KEQU outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months KEQU was mostly loss making and delivered on average -0.44% per day. It's best return during this period (of +8.59%) was on Wednesday, 12 Dec, 2018. While it's worst loss in the same period (of -8.87%) was on Thursday, 6 Dec, 2018. There was initially a bearish trend during this period which started on 1 Oct, 2018 and went on till 5 Oct, 2018. The trend delivered -14.36% losses to investors. This was followed by a bullish trend that started on 6 Nov, 2018 and ended on 12 Nov, 2018. This bullish trend delivered +2.41% to investors.

On monthly basis, KEQU delivered profits and losses in equal number of months. KEQU delivered profits less regularly than SP500 index. KEQU significantly outperformed SP500 index in Mar 2018, when it returned +14.45% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. KEQU had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

All intelligent investing is value investing - acquiring more than you are paying for. You must value the business in order to value the stock .
-- Charles Thomas Munger

KEQU 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 fall in KEQU's volatility from 13 Sep, 2018 to 12 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 KEQU has significant positive skewness in it's return distribution. This indicates that investors can expect KEQU to recover from drawdowns quickly. Which makes KEQU 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 KEQU. Therefore, SP500 must receive a lower allocation than KEQU in your portfolio. SP500 index usually has shorter drawdown period than KEQU.

On a general note (since you are interested in KEQU), three mid cap instruments that deserve special mention are SQ, TWTR and AMD. They have all outperformed the market and must be closely watched for investment opportunities.

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