30.23 +0.02 (+0.07%) Sell

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

13 min read

SOUTH JERSEY INDUSTRIES INC outperformed the broader market on Friday. It increased by +0.07% to close at 30.23. It is currently trading -16% below it's 52 week high of 36.13.

[Themes containing SJI]

Buy-and-Hold investors in SJI experienced a maximum drawdown of -18.24% over the last three months. It delivered -15.46% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +6.61%.


SJI has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 18 Apr, 2017 to 28 Feb, 2018. Over the last 2 years 11 months and 10 days, SJI underperformed the SP500 index on 46% days. Which indicates that on days SJI underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months SJI was mostly loss making and delivered on average -0.25% per day. It's best return during this period (of +3.01%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -8.01%) was on Monday, 22 Oct, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 2 Oct, 2018 and went on till 9 Oct, 2018. This bullish trend returned +4.39% to investors.

The last 12 months saw SJI's investors making profits in 6 months and incurring losses in 6 months. SJI was less consistent in delivering monthly returs than SP500 index. SJI was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -14.6% compared to -7.28% returned by SP500 index in Oct 2018. SJI had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

I owe my success to having listened respectfully to the very best advice, and then going away and doing the exact opposite.
-- G. K. Chesterton

SJI 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 SJI's volatility from 18 Sep, 2018 to 23 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that SJI has significant positive skewness in it's return distribution. This indicates that investors can expect SJI to recover from drawdowns quickly. Which makes SJI 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 SJI. Therefore, SP500 must receive a lower allocation than SJI in your portfolio. SP500 index usually has shorter drawdown period than SJI.

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

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