24.29 -0.9 (-3.69%) Sell

MOMO is a falling knife, continues to bleed every investor trying to catch it

13 min read

MOMO INC. (Foreign) was among the worst performers today. It delivered -3.69% to close at 24.29. During the last week it delivered -1.18% and saw a maximum drawdown of -5.04% before bouncing back.

[Themes containing MOMO]

MOMO is currently in a bearish trend. The current bearish signal has generated a profit of +41.89% for investors in the last three months.


MOMO has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 12 Feb, 2016 to 14 Jun, 2018. Over the last 2 years 11 months and 10 days, MOMO outperformed the SP500 index on 50% days. Which indicates that on days MOMO outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months MOMO was mostly loss making and delivered on average -0.99% per day. It's best return during this period (of +9.56%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -14.64%) was on Thursday, 6 Dec, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +10.95%) started on 28 Nov, 2018 and went on till 3 Dec, 2018 while the bearish trend (which returned -6.2%) started on 19 Sep, 2018 and went on till 24 Sep, 2018.

The last 12 months saw MOMO's investors making profits in 5 months and incurring losses in 7 months. MOMO was less consistent in delivering monthly returs than SP500 index. MOMO significantly outperformed SP500 index in May 2018, when it returned +31.58% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. MOMO 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 -55.31%.

Too many people spend money they buy things they don't impress people that they don't like.
-- Will Rogers

MOMO is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in MOMO's volatility from 1 Oct, 2018 to 19 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that MOMO 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 MOMO derivatives at this moment can consider 'Married Put' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in MOMO), three large cap instruments that deserve special mention are PFE, UNH and V. They have all outperformed the market and must be closely watched for investment opportunities.

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.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