Tech Small Caps THEME

1153.95 +16.83 (+1.46%) Sell

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Stop-loss on the minds of TECHSMALLCAPS THEME investors as it significantly underperforms

14 min read

Tech Small Caps has destroyed investor wealth on Tuesday. It gained +1.46% to close at 1153.95. It is currently trading -18% below it's 52 week high of 1407.79.

[Theme constituents]

~TECHSMALLCAPS is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +9.06% for investors.

Trend

~TECHSMALLCAPS has been outperforming the SP500 index in recent time. Over the last 1 year 1 month and 1 day, ~TECHSMALLCAPS outperformed the SP500 index on 59% days.

~TECHSMALLCAPS returned losses on 53% days in the last three months. During this time, it delivered on average -0.24% per day. It delivered it's worst daily return of -6.71%, during this period, on Monday, 19 Nov, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -13.66% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 1 Nov, 2018. This bullish trend delivered +9.34% to investors.

~TECHSMALLCAPS had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of ~TECHSMALLCAPS and SP500 index were the same. ~TECHSMALLCAPS significantly outperformed SP500 index in Aug 2018, when it returned +18.48% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ~TECHSMALLCAPS and SP500 index, both had periods of 6 consecutive profitable months.

"A bull market is very much like being in love. You don't realise its value till It's gone.

~TECHSMALLCAPS 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 ~TECHSMALLCAPS's volatility from 28 Sep, 2018 to 19 Nov, 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 ~TECHSMALLCAPS has significant positive skewness in it's return distribution. This indicates that investors can expect ~TECHSMALLCAPS to recover from drawdowns quickly. Which makes ~TECHSMALLCAPS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

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

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