34.59 +0.18 (+0.52%) Sell

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

13 min read

YELP INC was among the best performers on Friday. It returned +0.52% to close at 34.59. On a day when the overall market breadth was 35%, it closed higher than 18% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing YELP]

YELP showed a strong down trend over the last 3 months. During this period YELP returned -23.56% and saw a maximum drawdown of -41.1%. There was a short signal during this period which returned +22.5%.


YELP has been underperforming the SP500 index in recent time, after having outperformed till 4 Oct, 2016. Over the last 2 years 11 months and 3 days, YELP underperformed the SP500 index on 48% days. Which indicates that on days YELP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months YELP was mostly loss making and delivered on average -0.32% per day. It's best return during this period (of +7.97%) was on Tuesday, 18 Sep, 2018. While it's worst loss in the same period (of -26.6%) was on Friday, 9 Nov, 2018. There was initially a bullish trend during this period which started on 12 Sep, 2018 and went on till 18 Sep, 2018. The bullish trend returned +10.27% to investors. This was followed by a bearish trend that started on 4 Oct, 2018 and ended on 10 Oct, 2018. This bearish trend lost -13.76% of investor capital.

On monthly basis, YELP delivered losses in more months over the last year, than profits. YELP delivered profits less regularly than SP500 index. YELP significantly outperformed SP500 index in Aug 2018, when it returned +27.77% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. YELP had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -19.91%.

"I made my money by selling too soon.

YELP 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 YELP's volatility from 10 Sep, 2018 to 12 Nov, 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 YELP 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 YELP derivatives at this moment can consider 'Bull Call Spread' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in YELP), CSCO is a large cap that deserves to be closely tracked for investment opportunities.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
Symbol Price {{retType}} | Tr.
{{detail.symbol}} {{detail.close}} {{detail.priceChange}}  {{detail.pctChange}}%  {{}} {{detail.trend}} 
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter