High Spirits THEME

1317.48 -6.27 (-0.48%) Sell

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

13 min read

High Spirits ranked among the best performers on Thursday. It delivered -0.48% to close at 1317.48. On a day when the overall market breadth was 35%, it closed higher than 73% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Theme constituents]

~ALCOHOL is currently in a bearish trend. The current bearish signal has generated a profit of +9.46% for investors in the last three months.

Trend

~ALCOHOL has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 14 Jan, 2016 to 11 Apr, 2018. Over the last 2 years 11 months and 9 days, ~ALCOHOL outperformed the SP500 index on 51% days.

During the last three months ~ALCOHOL was mostly loss making and delivered on average -0.16% per day. It's best return during this period (of +1.98%) was on Tuesday, 16 Oct, 2018. While it's worst loss in the same period (of -2.53%) was on Tuesday, 4 Dec, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +4.0%) started on 26 Oct, 2018 and went on till 1 Nov, 2018 while the bearish trend (which returned -1.22%) started on 27 Sep, 2018 and went on till 3 Oct, 2018.

The last 12 months saw ~ALCOHOL's investors making profits in 5 months and incurring losses in 7 months. ~ALCOHOL was less consistent in delivering monthly returs than SP500 index. ~ALCOHOL was also a less risky investment than SP500 index as it's worst month in the last year, May 2018, returned -4.3% compared to -7.28% returned by SP500 index in Oct 2018. ~ALCOHOL had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -13.93%. It is interesting to note that both ~ALCOHOL and SP500 index significantly outperform during months when quarterly/annual results are announced.

If all the economists were laid end to end, they'd never reach a conclusion.
-- George Bernard Shaw

~ALCOHOL 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 ~ALCOHOL's volatility from 17 Sep, 2018 to 7 Dec, 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 ~ALCOHOL 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.

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

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

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