12.75 +0.03 (+0.24%) Sell

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

13 min read

WPX outperformed the broader market today. On a longer term basis, investors in WPX ENERGY, INC. made +0.04% per day. Thursday's performance of +0.24% was a outperformance compared to it's daily average.

[Themes containing WPX]

WPX showed a strong bearish trend over the last 3 months. During this period WPX delivered -28.61% and saw a maximum drawdown of -38.82%. There was a short signal during this period which returned +28.61%.


WPX has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 20 Jan, 2016 to 3 Oct, 2018. Over the last 2 years 11 months and 9 days, WPX outperformed the SP500 index on 52% days.

During the last three months WPX was mostly loss making and delivered on average -0.5% per day. It's best return during this period (of +6.24%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -6.18%) was on Wednesday, 10 Oct, 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 -15.67% of investor capital.

The last 12 months saw WPX's investors making profits in 7 months and incurring losses in 5 months. WPX was less consistent in delivering monthly returs than SP500 index. WPX significantly outperformed SP500 index in Apr 2018, when it returned +25.66% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. WPX had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both WPX and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Beware of little expenses. A small leak will sink a great ship.

WPX 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 WPX's volatility from 17 Sep, 2018 to 14 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 WPX 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.

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

On a general note (since you are interested in WPX), three instruments that have performed similar to WPX are SHLO, SHAK and SIFY. They must all be evaluated as alternative investment options and for diversification.

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