I changed my screening a little to find stocks with higher betas, but still heavily capitalized and very liquid. I also decided I would avoid stocks with ridiculously high or low P/Es. (Why? Just because.) One of the stocks that surfaced was Unisys, which is so old-school and boring I figured it would be a waste of time. But this analysis tool I built is so easy to use, I figured, “what the hey”, and I am glad I did. Running the Touch SMA analysis proved an unexpected success for this Unisys Trade. The details:
Unisys Trade Statistics
- Company Name: Unisys Corp
- Symbol: UIS
- Market Cap: $1.3B
- 3M Average Daily Volume: ~551000 shares
- Time Period Analyzed: November 2009 – 21 July 2014
- Number of trading days: 1689
- Number of trades from this signal: 73
- Number of winning trades: 30
- Number of losing trades: 43
- Average Win per share: $3.56
- Average Loss per share: -$0.75
- Max Win per Share traded: $52.50
- Max Loss per share traded: -$1.51
- Max Drawdown: 34%
Trading Strategy for Unisys
Like the Noble Corp trade I posted earlier this week, this trade is a modification of my Touch SMA strategy I’ve been testing the last month or so. (See here, here & here.) This trade has 3 setups. First, the price 2 days ago must be below the moving average. Second, the price yesterday has to be above the moving average and third, the close yesterday has to be above the open yesterday. I also added a trailing stop to this trade. (If it is not obvious, this is a Long-Only trade.
The optimal Moving Average length is 9 days, the Profit Target is 160% of the entry price, and the stop-loss trigger is 95% of the entry price. I normally test starting the first of January 2009, (for reasons why, see here), but UIS wasn’t trading above $10 till the end of November that year, so I didn’t trade it.
I’m not wild about the size of the drawdown, but even the famous Turtles accepted drawdowns as high as 40%.
Comparison of Trade to Buy & Hold
This trade is in the market a third as long as Buy & Hold would be. As it happens, no one in their right mind would have bought & held UIS over the time period tested, because it would be a negative trade. However, this strategy I used started with a $10,000 account and generated $37,000 in profits after subtracting fees, commissions and Cap Gains taxes.
If you’d be interested in video demonstrating the spreadsheet I use to do these analyses, drop me a note or leave a comment.