31.88 +0.5 (+1.56%) Sell

STLD investors update their stop-losses higher

13 min read

STEEL DYNAMICS INC outperformed the broader market today. It increased by +1.56% to close at 31.88. It's recent 5 day performance has been -2.52%, -0.56%, +1.19%, +2.37% and -1.73%.

[Themes containing STLD]

STLD is currently in a bearish trend. The current bearish signal has generated a profit of +32.46% for investors in the last three months.


STLD has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 11 Jan, 2016 to 17 May, 2018. Over the last 2 years 11 months and 14 days, STLD outperformed the SP500 index on 53% days.

During the last three months STLD was mostly loss making and delivered on average -0.6% per day. It's best return during this period (of +4.04%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -8.95%) was on Tuesday, 27 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -8.61% of investor capital.

During the last year STLD had 5 profitable months and 7 loss making months. STLD returned profits in fewer months than SP500 index. STLD was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -13.33% compared to -7.75% returned by SP500 index in Dec 2018. STLD had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -37.94%. It is interesting to note that both STLD and SP500 index significantly outperform during months when quarterly/annual results are announced.

Buy at the point of maximum pessimism; sell at the point of maximum optimism.
-- Sir John Templeton

STLD is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in STLD's volatility from 9 Oct, 2018 to 28 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 STLD 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.

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

Based on your interest in STLD you may find it interesting to know that DFBG and HEAR have both shown remarkable performance this year and deserve to be on every investors' watchlist.

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