7.02 +0.47 (+6.69%) Sell

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

13 min read

PLAYA HOTELS & RESORTS N.V. was among the best performers on Tuesday. It returned +6.69% to close at 7.02. It is currently trading -38% below it's 52 week high of 11.45.

[Themes containing PLYA]

PLYA showed a strong down trend over the last 3 months. During this period PLYA lost -23.61% and saw a maximum drawdown of -36.53%. There was a short signal during this period which returned +28.4%.


PLYA has been outperforming the SP500 index in recent time. Over the last 1 year 9 months and 5 days, PLYA underperformed the SP500 index on 55% days.

During the last three months PLYA was mostly loss making and delivered on average -0.4% per day. It's best return during this period (of +6.99%) was on Monday, 17 Dec, 2018. While it's worst loss in the same period (of -5.54%) was on Monday, 10 Dec, 2018. There was initially a bullish trend during this period which started on 12 Oct, 2018 and went on till 17 Oct, 2018. The bullish trend returned +3.6% to investors. This was followed by a bearish trend that started on 6 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -12.05% of investor capital.

PLYA had 3 profitable and 9 loss making months over the last year. During the last year, PLYA underperformed SP500 index on monthly return basis. PLYA was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -11.76% compared to -7.75% returned by SP500 index in Dec 2018. PLYA had a longer winning streak of losing months than SP500 index. It went down in 6 straight months (from Jul 2018 to Dec 2018) during which period it delivered -39.8%.

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PLYA 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 PLYA's volatility from 19 Sep, 2018 to 19 Nov, 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 PLYA has significant negative skewness in it's return distribution. This indicates that PLYA is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in PLYA), AAXN is a small cap that deserves to be closely tracked for investment opportunities.

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