NEWMARKET CORP

399.68 +4.65 (+1.16%) Sell

NEU shows sign of weakness as investors do cost averaging

13 min read

NEWMARKET CORP ranked better than it's peers on Wednesday. It delivered +1.16% to close at 399.68. It is currently trading +10% above it's 52 week low of 361.42 and is down only -8% from it's 52 week high.

[Themes containing NEU]

Buy-and-Hold investors in NEU experienced a maximum drawdown of -11.29% over the last three months. It delivered +0.43% during this flat trending period. There were both Long and Short signals during this period, while the long signals were marginally more profitable than the short signals.

Trend

NEU has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 28 Jul, 2016 to 9 Aug, 2018. Over the last 2 years 11 months and 8 days, NEU underperformed the SP500 index on 47% days. Which indicates that on days NEU underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months NEU was mostly profitable and delivered on average +0.02% per day. It's best return during this period (of +3.0%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -5.09%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 17 Sep, 2018 and went on till 21 Sep, 2018. This bullish trend returned +2.87% to investors.

During the last year NEU had 6 profitable months and 6 loss making months. NEU returned profits in fewer months than SP500 index. NEU significantly outperformed SP500 index in Nov 2018, when it returned +8.94% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. NEU had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

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NEU 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 NEU's volatility from 28 Sep, 2018 to 26 Oct, 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 NEU has significant positive skewness in it's return distribution. This indicates that investors can expect NEU to recover from drawdowns quickly. Which makes NEU 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 NEU. Therefore, SP500 must receive a lower allocation than NEU in your portfolio. NEU usually has shorter drawdown period than the SP500 index.

Based on your interest in NEU you may find it interesting to know that TPNL has shown remarkable performance this year and deserves to be on every investors' watchlist.

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