26.1 +0.37 (+1.4%) Sell

Profit booking on the minds of SCHN investors as it ranks better than it's peers but, has not managed to breakout

13 min read

SCHNITZER STEEL INDUSTRIES INC is looking better than most other alternatives on Wednesday. It grew by +1.4% to close at 26.1. It is currently trading -32% below it's 52 week high of 38.7.

[Themes containing SCHN]

SCHN is currently in a down trend. Over the last three months trading short signals has not been a profitable strategy for SCHN's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -1.88%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to SCHN.


SCHN has been underperforming the SP500 index in recent time, after having outperformed till 11 Jan, 2018. Over the last 2 years 11 months and 8 days, SCHN outperformed the SP500 index on 52% days.

During the last three months SCHN was mostly loss making and delivered on average -0.0% per day. It's best return during this period (of +8.96%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -5.1%) was on Monday, 26 Nov, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 17 Sep, 2018. The bullish trend returned +0.94% to investors. This was followed by a bearish trend that started on 3 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -6.33% of investor capital.

SCHN had 4 profitable and 8 loss making months over the last year. During the last year, SCHN underperformed SP500 index on monthly return basis. SCHN was also a more risky investment than SP500 index as it's worst month in the last year, Aug 2018, returned -20.03% compared to -7.28% returned by SP500 index in Oct 2018. SCHN had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Jan 2018 to Apr 2018) during which period it delivered -14.38%.

Empty pockets never held anyone back. Only empty heads and empty hearts can do that.
-- Norman Vincent Peale

SCHN 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 SCHN's volatility from 17 Sep, 2018 to 29 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 SCHN 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 SCHN. Therefore, SP500 must receive a lower allocation than SCHN in your portfolio. SP500 index usually has shorter drawdown period than SCHN.

On a general note (since you are interested in SCHN), two mid cap instruments that deserve special mention are ABMD and SQ. They have significantly outperformed the overall market.

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