STX investors dump it
11 Dec, 201813 min read
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SEAGATE TECHNOLOGY PLC delivered massive losses today. It fell by -0.78% to close at 39.5. It's recent 5 day performance has been -0.23%, -4.2%, +0.19%, -7.13% and +3.88%.
STX is currently in a bearish trend. The current bearish signal has generated a profit of +20.15% for investors in the last three months.
STX has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 11 May, 2016 to 18 Apr, 2018. Over the last 2 years 11 months and 7 days, STX underperformed the SP500 index on 44% days. Which indicates that on days STX underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
STX returned losses on 51% days in the last three months. During this time, it delivered on average -0.32% per day. It delivered it's worst daily return of -8.94%, during this period, on Friday, 26 Oct, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 30 Oct, 2018 and went on till 7 Nov, 2018. This bullish trend returned +19.6% to investors.
During the last year STX had 6 profitable months and 6 loss making months. STX returned profits in fewer months than SP500 index. STX significantly outperformed SP500 index in Jan 2018, when it returned +28.58% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. STX had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year.
Never invest emergency savings in the stock market.
-- Suze Orman
STX 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 STX's volatility from 25 Sep, 2018 to 2 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that STX has significant positive skewness in it's return distribution. This indicates that investors can expect STX to recover from drawdowns quickly. Which makes STX a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in STX derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than STX. Therefore, SP500 must receive a lower allocation than STX in your portfolio. STX usually has shorter drawdown period than the SP500 index.
On a general note (since you are interested in STX), EPIX has performed really well and deserves to be closely tracked for investment opportunities.
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