Biggest Winners Losing The Most In The Recent Pullback
Biggest Winners Losing The Most In The Recent Pullback
Profit-Taking?
Unloading Recent Winners
by BespokeInvest
After coasting through June and the July 4th holiday trading week, traders and investors have gotten a rude awakening since coming back to the office this week. The average stock in the Russell 1,000 is down 1.90% this week. While that's really not much in the scheme of things, it feels worse given how low volatility has been over the last few months.
So what's leading the way lower this week? Basically anything that has rallied since the market took off from its sideways trading range on May 21st. If you came into this week holding onto recent winners, you're likely feeling the pain trade that was felt in March and April all over again.
Below we have broken up the Russell 1,000 (IWB) into deciles (10 groups of 100 stocks each) based on stock performance from 5/20 through last Thursday's close. The deciles are sorted from the 100 best performers over this time period (all the way to the left) to the 100 worst performers (all the way to the right). For each decile, we have calculated the average change of its stocks so far this week.
Russell 1k Performance By Decile
As shown, the stocks in the decile of the 100 best performing Russell 1,000 names during the 5/20-7/3 rally are down an average of 4.47% this week! That's more than 2.3x the average decline for all Russell 1,000 stocks, and it's by far the worst performing decile of the group. The second best 100 performing Russell 1,000 stocks during the 5/20-7/3 rally are down an average of 2.82% this week, which is the second worst performing decile of the group.
As you move across the spectrum of deciles from left to right, performance this week gets better and better, although all deciles are averaging declines. The bottom line is that investors are taking profits in recent winners from an overbought market as we enter earnings season. Who knows how long the selling will continue, but if you have been waiting for a pullback to get into names that had left you behind over the last few months, you're getting an opportunity. Unfortunately, a lot of investors waiting for pullbacks have a difficult time pulling the trigger when the pullback finally comes.
Courtesy of bespokeinvest.com