80.66 -1.98 (-2.46%) Sell

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

13 min read

SOUTHWEST GAS HOLDINGS, INC. is a falling knife that can bleed you if you catch it on Monday. It returned -2.46% to close at 80.66. On a day when the overall market breadth was 34%, it closed higher than 10% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing SWX]

SWX is currently in a down trend. Over the last three months trading short signals has not been a profitable strategy for SWX's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -1.24%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to SWX.


SWX has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, SWX outperformed the SP500 index on 52% days.

During the last three months SWX delivered profits on 53% days. However, it still managed to end this period in a loss. It's best return during this period (of +2.51%) was on Friday, 30 Nov, 2018. While it's worst loss in the same period (of -7.73%) was on Tuesday, 27 Nov, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 26 Sep, 2018. The trend delivered -3.71% losses to investors. This was followed by a bullish trend that started on 2 Oct, 2018 and ended on 8 Oct, 2018. This bullish trend delivered +4.47% to investors.

On monthly basis, SWX delivered profits in more months over the last year, than losses. SWX delivered profits less regularly than SP500 index. SWX was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -10.46% compared to -7.28% returned by SP500 index in Oct 2018. SWX had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.
-- Ayn Rand

SWX is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in SWX's volatility from 18 Sep, 2018 to 30 Nov, 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 SWX has significant positive skewness in it's return distribution. This indicates that investors can expect SWX to recover from drawdowns quickly. Which makes SWX a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in SWX you may find it interesting to know that AMD is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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