29.59 -1.04 (-3.52%) Sell

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

13 min read

SU was among the worst performers today. On a longer term basis, investors in SUNCOR ENERGY INC (Foreign) made +0.01% per day. Friday's performance of -3.52% was a significant underperformance compared to it's daily average.

[Themes containing SU]

SU showed a strong down trend over the last 3 months. During this period SU lost -22.5% and saw a maximum drawdown of -26.02%. There was a short signal during this period which returned +22.5%.


SU has been underperforming the SP500 index in recent time, after having outperformed till 17 May, 2018. Over the last 2 years 11 months and 10 days, SU underperformed the SP500 index on 48% days. Which indicates that on days SU underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

SU returned losses on 59% days in the last three months. During this time, it delivered on average -0.39% per day. It delivered it's best daily return of +4.45%, during this period, on Wednesday, 21 Nov, 2018. There was initially a bearish trend during this period which started on 9 Oct, 2018 and went on till 12 Oct, 2018. The trend delivered -6.67% losses to investors. This was followed by a bullish trend that started on 5 Nov, 2018 and ended on 7 Nov, 2018. This bullish trend delivered +4.7% to investors.

SU had 5 profitable and 7 loss making months over the last year. During the last year, SU underperformed SP500 index on monthly return basis. SU was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -16.24% compared to -7.28% returned by SP500 index in Oct 2018. SU had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both SU and SP500 index significantly outperform during months when quarterly/annual results are announced.

Here's my gift-giving rule: Respect your current financial situation.
-- Suze Orman

SU 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 SU's volatility from 17 Sep, 2018 to 11 Dec, 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 SU 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.

Investors trading in SU derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in SU), two instruments that have delivered similar performance as SU are SELF and CHA. They are suitable as good alternative investment candidates that can diversify your portfolio.

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