High Momentum THEME

1897.38 +0.31 (+0.02%) Sell

Optimize theme

Don't buy HIGHMOMENTUM THEME now, it is an investor's nightmare

14 min read

High Momentum is a falling knife that can bleed you if you catch it on Tuesday. It surged by +0.02% to close at 1897.38. On a day when the overall market breadth was 34%, it closed higher than 84% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Theme constituents]

~HIGHMOMENTUM showed a strong bearish trend over the last 3 months. During this period ~HIGHMOMENTUM fell by -17.51% and saw a maximum drawdown of -18.45%. There was a short signal during this period which returned +17.52%.


~HIGHMOMENTUM has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 31 May, 2017 to 20 Jun, 2018. Over the last 2 years and 5 months, ~HIGHMOMENTUM outperformed the SP500 index on 55% days.

~HIGHMOMENTUM returned losses on 61% days in the last three months. During this time, it delivered on average -0.29% per day. It delivered it's worst daily return of -4.59%, during this period, on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 7 losing days, which started on 4 Oct, 2018 and ended on 12 Oct, 2018. This bearish trend lost -8.05% of investor capital.

During the last year ~HIGHMOMENTUM had 8 profitable months and 4 loss making months. Profitable number of months of ~HIGHMOMENTUM and SP500 index were the same. ~HIGHMOMENTUM was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -11.01% compared to -7.75% returned by SP500 index in Dec 2018. ~HIGHMOMENTUM had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both ~HIGHMOMENTUM and SP500 index significantly outperform during months when quarterly/annual results are announced.

Money is multiplied in practical value depending on the number of W's you control in your life: what you do, when you do it, where you do it, and with whom you do it.
-- Timothy Ferriss

~HIGHMOMENTUM 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 ~HIGHMOMENTUM's volatility from 27 Sep, 2018 to 25 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ~HIGHMOMENTUM has significant positive skewness in it's return distribution. This indicates that investors can expect ~HIGHMOMENTUM to recover from drawdowns quickly. Which makes ~HIGHMOMENTUM a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ~HIGHMOMENTUM you may find it interesting to know that AMZN, V and PFE are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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.name}} {{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