An unusual winning streak in small resources

Livewire Equities


As at last Friday, the S&P/ASX Resources Index (XSR) had recorded 7 consecutive weekly gains providing a 7-week return of just over 17%. Since 1994, weekly winning streaks of this length are unusual, having been previously observed on only 9 independent occasions (down week followed by 7 up weeks).

The evidence suggests, that weekly upward streaks of this length and magnitude, have a statistically significant average return profile, in the subsequent 3-month to 1-year interval.

The only way is up!

Data compiled by Andrew McCauley, Quantitative and Statitical Analyst at Veritas Securities Limited, shines the light on this rare scenario. Of particular interest is the 100% 'Win Rate' recorded for both the 6-month and 12-month intervals with average returns of 14.21% and 26.3% respectively.

The full data set is outlined in the table below.

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