5.09 +0.07 (+1.39%) Sell

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

13 min read

METC delivered good returns today. On a longer term basis, investors in RAMACO RESOURCES, INC. made +0.21% per day. Tuesday's performance of +1.39% was a significant outperformance compared to it's daily average.

[Themes containing METC]

METC showed a strong down trend over the last 3 months. During this period METC returned -35.65% and saw a maximum drawdown of -41.16%. There was a short signal during this period which returned +27.39%.


METC has been underperforming the SP500 index in recent time, after having outperformed till 3 Feb, 2017. Over the last 1 year 10 months and 8 days, METC underperformed the SP500 index on 51% days.

During the last three months METC was mostly loss making and delivered on average -0.62% per day. It's best return during this period (of +8.92%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -11.66%) was on Thursday, 8 Nov, 2018. There was initially a bullish trend during this period which started on 1 Oct, 2018 and went on till 3 Oct, 2018. The bullish trend returned +10.23% to investors. This was followed by a bearish trend that started on 6 Nov, 2018 and ended on 13 Nov, 2018. This bearish trend lost -30.5% of investor capital.

On monthly basis, METC delivered losses in more months over the last year, than profits. METC delivered profits less regularly than SP500 index. METC was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -28.86% compared to -7.28% returned by SP500 index in Oct 2018. METC had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -42.73%. It is interesting to note that both METC and SP500 index significantly outperform during months when quarterly/annual results are announced.

Money often costs too much.
-- Ralph Waldo Emerson

METC 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 METC's volatility from 13 Sep, 2018 to 25 Sep, 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 METC has significant positive skewness in it's return distribution. This indicates that investors can expect METC to recover from drawdowns quickly. Which makes METC a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in METC you may find it interesting to know that AMD is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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