17.4 +0.39 (+2.23%) Sell

UA does a dead cat bounce, it's still too early to buy into it

13 min read

UNDER ARMOUR, INC. was among the best performers today. It returned +2.23% to close at 17.4. During the last week it returned -18.45% and saw a maximum drawdown of -18.45%.

[Themes containing UA]

Buy-and-Hold investors in UA experienced a maximum drawdown of -24.62% over the last three months. It returned +0.69% during this flat trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.


UA has been underperforming the SP500 index in recent time, after having outperformed till 28 Jan, 2016. Over the last 2 years 11 months and 14 days, UA underperformed the SP500 index on 54% days.

During the last three months UA delivered losses on 53% days. However, it still managed to end this period in a profit. It's best return during this period (of +24.75%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -8.91%) was on Wednesday, 12 Dec, 2018. There was initially a bullish trend during this period which started on 19 Sep, 2018 and went on till 24 Sep, 2018. The bullish trend returned +8.81% to investors. This was followed by a bearish trend that started on 7 Dec, 2018 and ended on 17 Dec, 2018. This bearish trend lost -27.4% of investor capital.

On monthly basis, UA delivered profits in more months over the last year, than losses. UA delivered profits less regularly than SP500 index. UA significantly outperformed SP500 index in May 2018, when it returned +23.26% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. UA had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

The stock market is a discounter of all known information.
-- Kenneth Fisher

UA 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 UA's volatility from 19 Sep, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

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

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

On a general note (since you are interested in UA), if you are an investor in VIPS, you need to be extra careful (consider limiting your exposure or diversifying) as it is extremely unpredictable and therefore risky.

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