TRACTOR SUPPLY CO

88.79 -3.44 (-3.88%) Sell

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

13 min read

TRACTOR SUPPLY CO delivered massive losses on Friday. It fell by -3.88% to close at 88.79. On a day when the overall market breadth was 35%, it closed higher than 9% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing TSCO]

TSCO is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for TSCO's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -1.28%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to TSCO.

Trend

TSCO has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 27 Jun, 2016 to 17 Apr, 2018. Over the last 2 years 11 months and 3 days, TSCO underperformed the SP500 index on 50% days. Which indicates that on days TSCO underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months TSCO was mostly profitable and delivered on average -0.0% per day. It's best return during this period (of +5.81%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -4.85%) was on Tuesday, 20 Nov, 2018. The longest stort-term trend during this period was 7 losing days, which started on 12 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -9.97% of investor capital.

During the last year TSCO had 9 profitable months and 3 loss making months. TSCO returned profits in more months than SP500 index. TSCO was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -14.85% compared to -7.28% returned by SP500 index in Oct 2018. TSCO had a longer winning streak of profitable months than SP500 index. It went up in 8 straight months (from Apr 2018 to Nov 2018) during which period it delivered +49.21%.

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TSCO 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 TSCO's volatility from 27 Sep, 2018 to 26 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that TSCO 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 TSCO derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

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

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