12.42 -0.14 (-1.11%) Sell

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

13 min read

NEOGENOMICS INC delivered massive losses on Tuesday. It fell by -1.11% to close at 12.42. On a day when the overall market breadth was 34%, it closed higher than 4% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Themes containing NEO]

NEO showed a strong bearish trend over the last 3 months. During this period NEO fell by -14.93% and saw a maximum drawdown of -32.86%. There were 2 short signals during this period that returned a cumulative of +15.09% to investors.


NEO has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 26 Jan, 2018 to 31 Oct, 2018. Over the last 2 years 11 months and 14 days, NEO outperformed the SP500 index on 51% days.

NEO returned losses on 61% days in the last three months. During this time, it delivered on average -0.22% per day. It delivered it's best daily return of +10.41%, during this period, on Tuesday, 30 Oct, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 23 Oct, 2018 and went on till 1 Nov, 2018. This bullish trend returned +31.27% to investors.

During the last year NEO had 7 profitable months and 5 loss making months. NEO returned profits in fewer months than SP500 index. NEO was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -24.27% compared to -7.75% returned by SP500 index in Dec 2018. NEO had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both NEO and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Under capitalism, man exploits man. Under communism, it's just the opposite.

NEO 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 NEO's volatility from 28 Sep, 2018 to 30 Oct, 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 NEO 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.

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

Based on your interest in NEO you may find it interesting to know that ECYT, NIHD and I have all shown remarkable performance this year and deserve to be on every investor's watchlist.

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