3.6 -0.03 (-0.83%) Sell

Stop-loss on the minds of ZNGA investors as it delivered massive losses

13 min read

ZYNGA INC ranked among the worst performers today. It lost -0.83% to close at 3.6. During the last week it lost -0.55% and saw a maximum drawdown of -2.74% before bouncing back.

[Themes containing ZNGA]

ZNGA is currently in a down trend. The previous short signal in ZNGA has not been profitable for investors in general. If you are short on ZNGA at current levels please make sure that your allocation is limited and that your portfolio is well diversified.


ZNGA has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 3 days, ZNGA outperformed the SP500 index on 49% days. Which indicates that on days ZNGA outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months ZNGA was mostly loss making and delivered on average -0.13% per day. It's best return during this period (of +12.37%) was on Tuesday, 9 Oct, 2018. While it's worst loss in the same period (of -5.22%) was on Monday, 29 Oct, 2018. There was initially a bullish trend during this period which started on 27 Sep, 2018 and went on till 4 Oct, 2018. The bullish trend returned +4.73% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -10.39% of investor capital.

ZNGA had 3 profitable and 9 loss making months over the last year. During the last year, ZNGA underperformed SP500 index on monthly return basis. ZNGA significantly outperformed SP500 index in May 2018, when it returned +27.54% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ZNGA had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -13.94%.

I'm only rich because I know when I'm wrong..I basically have survived by recognizing my mistakes.
-- George Soros

ZNGA is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in ZNGA's volatility from 10 Sep, 2018 to 10 Oct, 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 ZNGA 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 ZNGA derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

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

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