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

MOSAIC CO delivered good returns on Friday. It grew by +0.06% to close at 30.93. On a day when the overall market breadth was 35%, it closed higher than 73% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing MOS]

MOS is currently in a down trend. The previous short signal in MOS has not been profitable for investors in general. If you are short on MOS at current levels please make sure that your allocation is limited and that your portfolio is well diversified.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

MOS has been underperforming the SP500 index in recent time, after having outperformed till 7 Mar, 2016. Over the last 2 years 11 months and 10 days, MOS underperformed the SP500 index on 49% days. Which indicates that on days MOS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months MOS was mostly loss making and delivered on average -0.02% per day. It's best return during this period (of +10.61%) was on Tuesday, 6 Nov, 2018. While it's worst loss in the same period (of -6.33%) was on Wednesday, 12 Dec, 2018. There was initially a bullish trend during this period which started on 28 Sep, 2018 and went on till 4 Oct, 2018. The bullish trend returned +4.6% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 12 Dec, 2018. This bearish trend lost -17.22% of investor capital.

MOS had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of MOS and SP500 index were the same. MOS significantly outperformed SP500 index in Nov 2018, when it returned +16.35% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. MOS and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both MOS and SP500 index significantly outperform during months when quarterly/annual results are announced.

Finance is not merely about making money. It's about achieving our deep goals and protecting the fruits of our labor. It's about stewardship and, therefore, about achieving the good society.
-- Robert J. Shiller

MOS 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 MOS's volatility from 2 Oct, 2018 to 7 Nov, 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 MOS has significant positive skewness in it's return distribution. This indicates that investors can expect MOS to recover from drawdowns quickly. Which makes MOS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in MOS derivatives at this moment can consider 'Bull Call Spread' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in MOS), three instruments that deserve special mention are DFBG, TPNL and NFEC. They have all outperformed the market and must be closely watched for investment opportunities.