17.02 -0.05 (-0.29%) Sell

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

13 min read

TYPE is a falling knife that can bleed you if you catch it today. On a longer term basis, investors in MONOTYPE IMAGING HOLDINGS INC. made +0.02% per day. Thursday's performance of -0.29% was a underperformance compared to it's daily average.

[Themes containing TYPE]

TYPE showed a strong bearish trend over the last 3 months. During this period TYPE delivered -16.77% and saw a maximum drawdown of -18.53%. There was a short signal during this period which returned +10.18%.


TYPE has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 28 Jan, 2016 to 3 Dec, 2018. Over the last 2 years 11 months and 9 days, TYPE underperformed the SP500 index on 49% days. Which indicates that on days TYPE underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months TYPE was mostly loss making and delivered on average -0.28% per day. It's best return during this period (of +5.94%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -3.92%) was on Monday, 19 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -8.18% of investor capital.

The last 12 months saw TYPE's investors making profits in 2 months and incurring losses in 10 months. TYPE was less consistent in delivering monthly returs than SP500 index. TYPE was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -13.56% compared to -7.28% returned by SP500 index in Oct 2018. TYPE had a longer winning streak of losing months than SP500 index. It went down in 8 straight months (from May 2018 to Dec 2018) during which period it delivered -28.37%. It is interesting to note that both TYPE and SP500 index significantly outperform during months when quarterly/annual results are announced.

If you do chose to invest in a share, invest for the lifetime.
-- Sandeep Sahajpal

TYPE 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 TYPE's volatility from 14 Sep, 2018 to 19 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 TYPE has significant positive skewness in it's return distribution. This indicates that investors can expect TYPE to recover from drawdowns quickly. Which makes TYPE a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in TYPE), two small cap instruments that deserve special mention are EHC and AAXN. They have significantly outperformed the overall market.

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