162.03 -2.58 (-1.59%) Buy

WDAY investors herd to book profits while the going is good

13 min read

WORKDAY, INC. is a falling knife that can bleed you if you catch it on Friday. It delivered -1.59% to close at 162.03. On a day when the overall market breadth was 35%, it closed higher than 16% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing WDAY]

WDAY showed a strong bullish trend over the last 3 months. During this period WDAY increased by +11.95% and saw a maximum drawdown of -17.35%. There were 2 long signals during this period that returned a cumulative of +8.82% to investors.


WDAY has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 12 Feb, 2016 to 6 Dec, 2018. Over the last 2 years 11 months and 10 days, WDAY outperformed the SP500 index on 54% days.

During the last three months WDAY was mostly profitable and delivered on average +0.24% per day. It's best return during this period (of +12.87%) was on Friday, 30 Nov, 2018. While it's worst loss in the same period (of -7.57%) was on Monday, 19 Nov, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 24 Sep, 2018 and went on till 28 Sep, 2018. This bullish trend returned +5.21% to investors.

The last 12 months saw WDAY's investors making profits in 6 months and incurring losses in 6 months. WDAY was less consistent in delivering monthly returs than SP500 index. WDAY significantly outperformed SP500 index in Aug 2018, when it returned +24.61% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. WDAY had a shorter streak of profitable months than SP500 index. It only went up in 3 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

WDAY is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in WDAY's volatility from 1 Oct, 2018 to 20 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 WDAY 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 WDAY derivatives at this moment can consider 'Married Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in WDAY you may find it interesting to know that SCSC and SANM have both performed similar to WDAY and can be considered by investors as alternative investment options.

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