78.89 +0.61 (+0.78%) Sell

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

13 min read

ROSS STORES INC delivered good returns on Tuesday. It grew by +0.78% to close at 78.89. It is currently trading -23% below it's 52 week high of 103.33.

[Themes containing ROST]

ROST is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +8.6% for investors.


ROST has been underperforming the SP500 index in recent time, after having outperformed till 12 Nov, 2018. Over the last 2 years 11 months and 14 days, ROST outperformed the SP500 index on 52% days.

During the last three months ROST was mostly loss making and delivered on average -0.31% per day. It's best return during this period (of +4.47%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -9.38%) was on Tuesday, 20 Nov, 2018. There was initially a bullish trend during this period which started on 2 Nov, 2018 and went on till 8 Nov, 2018. The bullish trend returned +4.9% to investors. This was followed by a bearish trend that started on 9 Nov, 2018 and ended on 23 Nov, 2018. This bearish trend lost -24.48% of investor capital.

On monthly basis, ROST delivered profits in more months over the last year, than losses. ROST delivered profits less regularly than SP500 index. ROST was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -11.52% compared to -7.75% returned by SP500 index in Dec 2018. ROST had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both ROST 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.

ROST is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in ROST's volatility from 19 Sep, 2018 to 21 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 ROST 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 ROST. Therefore, SP500 must receive a lower allocation than ROST in your portfolio. SP500 index usually has shorter drawdown period than ROST.

On a general note (since you are interested in ROST), two instruments that deserve special mention are NSPR and TYHT. They have significantly outperformed the overall market.

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