Textiles THEME

930.625 +0.06 (+0.01%) Sell

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TEXTILES THEME is a falling knife, continues to bleed every investor trying to catch it

14 min read

Textiles has destroyed investor wealth on Tuesday. It delivered +0.01% to close at 930.625. On a day when the overall market breadth was 34%, it closed higher than 18% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Theme constituents]

~TEXTILES showed a strong bearish trend over the last 3 months. During this period ~TEXTILES fell by -25.75% and saw a maximum drawdown of -26.03%. There was a short signal during this period which returned +25.75%.

Trend

~TEXTILES has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 29 Dec, 2016 to 4 Dec, 2018. Over the last 2 years 11 months and 14 days, ~TEXTILES underperformed the SP500 index on 48% days. Which indicates that on days ~TEXTILES underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ~TEXTILES was mostly loss making and delivered on average -0.45% per day. It's best return during this period (of +5.47%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -8.85%) was on Friday, 26 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 5 Nov, 2018 and ended on 12 Nov, 2018. This bearish trend lost -4.85% of investor capital.

During the last year ~TEXTILES had 3 profitable months and 9 loss making months. ~TEXTILES returned profits in fewer months than SP500 index. ~TEXTILES was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -13.84% compared to -7.75% returned by SP500 index in Dec 2018. ~TEXTILES 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 -29.49%. It is interesting to note that both ~TEXTILES and SP500 index significantly outperform during months when quarterly/annual results are announced.

"The monarchy is foremost a business, and it's important to them that the British public continue to finance the excessive luxurious lifestyles of the now quite enormous, wasteful and useless 'royal' family. I find it very sad.

~TEXTILES 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 ~TEXTILES's volatility from 21 Sep, 2018 to 30 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 ~TEXTILES has significant positive skewness in it's return distribution. This indicates that investors can expect ~TEXTILES to recover from drawdowns quickly. Which makes ~TEXTILES a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ~TEXTILES you may find it interesting to know that CNP, PBBI and ALSN have all performed similar to ~TEXTILES and qualify as alternative investment candidates that must be evaluated for diversification.

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