Technology THEME

1721.77 -56.43 (-3.28%) Sell

Optimize theme

Don't invest in TECHNOLOGY THEME now, it is a risky investment

14 min read

Technology delivered massive losses on Friday. It delivered -3.28% to close at 1721.77. It is currently trading -18% below it's 52 week high of 2103.82.

[Theme constituents]

~TECHNOLOGY showed a strong bearish trend over the last 3 months. During this period ~TECHNOLOGY delivered -15.54% and saw a maximum drawdown of -18.31%. There was a short signal during this period which returned +10.35%.


~TECHNOLOGY has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 10 Feb, 2016 to 6 Jun, 2018. Over the last 2 years 11 months and 3 days, ~TECHNOLOGY outperformed the SP500 index on 59% days.

During the last three months ~TECHNOLOGY was mostly loss making and delivered on average -0.25% per day. It's best return during this period (of +3.41%) was on Tuesday, 16 Oct, 2018. While it's worst loss in the same period (of -4.94%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -10.06% of investor capital.

The last 12 months saw ~TECHNOLOGY's investors making profits in 7 months and incurring losses in 5 months. ~TECHNOLOGY was less consistent in delivering monthly returs than SP500 index. ~TECHNOLOGY was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -12.13% compared to -7.28% returned by SP500 index in Oct 2018. ~TECHNOLOGY 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 ~TECHNOLOGY and SP500 index significantly outperform during months when quarterly/annual results are announced.

"The best thing money can buy is financial freedom.

~TECHNOLOGY is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in ~TECHNOLOGY's volatility from 3 Oct, 2018 to 25 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 ~TECHNOLOGY has significant positive skewness in it's return distribution. This indicates that investors can expect ~TECHNOLOGY to recover from drawdowns quickly. Which makes ~TECHNOLOGY a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ~TECHNOLOGY you may find it interesting to know that PRQR and AMRN have both shown remarkable performance this year and deserve to be on every investors' 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.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