172.75 -5.22 (-3.02%) Sell

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

13 min read

SHIRE PLC delivered massive losses today. It lost -3.02% to close at 172.75. It's recent 5 day performance has been +3.87%, -2.52%, +0.2%, +2.39% and -0.87%.

[Themes containing SHPG]

SHPG is currently in a down trend. Over the last three months trading short signals has not been a profitable strategy for SHPG's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned +2.84%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to SHPG.


SHPG has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 3 days, SHPG underperformed the SP500 index on 51% days.

During the last three months SHPG was mostly profitable and delivered on average +0.06% per day. It's best return during this period (of +3.87%) was on Thursday, 6 Dec, 2018. While it's worst loss in the same period (of -3.59%) was on Wednesday, 24 Oct, 2018. There was initially a bearish trend during this period which started on 13 Nov, 2018 and went on till 16 Nov, 2018. The trend delivered -3.54% losses to investors. This was followed by a bullish trend that started on 19 Nov, 2018 and ended on 26 Nov, 2018. This bullish trend delivered +1.28% to investors.

SHPG had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of SHPG and SP500 index were the same. SHPG significantly outperformed SP500 index in Mar 2018, when it returned +16.71% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. SHPG had a longer winning streak of profitable months than SP500 index. It went up in 8 straight months (from Mar 2018 to Oct 2018) during which period it delivered +38.44%.

Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.
-- Johann Wolfgang von Goethe

SHPG 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 SHPG's volatility from 27 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that SHPG has significant positive skewness in it's return distribution. This indicates that investors can expect SHPG to recover from drawdowns quickly. Which makes SHPG a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in SHPG derivatives at this moment can consider 'Calendar Spread' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in SHPG), three instruments that deserve special mention are NFEC, AMRN and PRQR. They have all outperformed the market and must be closely watched for investment opportunities.

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