Monthly Drawdown Report: April 2026

April 2026 marks a period of significant churn within our tracked universe of 740 assets. We observe a market in a state of high kinetic energy where individual stock recoveries are clashing against fresh sectoral declines. The data suggests that while the broader market indices may appear stable, the underlying drawdown architecture is shifting rapidly.

We see a notable divergence between the established historical laggards and a new wave of mid-cap volatility. Our proprietary severity metrics indicate that the average severity across all 740 tracked assets now sits at 5.4. This figure represents a baseline of moderate stress, though the distribution remains heavily weighted toward the extremes of the spectrum.

Monthly Summary and Distribution Breakdown

The distribution of assets across our three primary risk zones reveals a market that remains bifurcated. We currently track 323 assets in the Red Zone, which accounts for 43.6% of our total coverage. This Red Zone represents stocks experiencing significant price erosion and extended recovery timelines.

The Yellow Zone currently contains 184 assets, representing 24.9% of the total tracked universe. These assets are in a state of transition, either recovering from deep drawdowns or beginning to show signs of structural weakness. We view this zone as the primary staging area for future Red Zone entries or Green Zone recoveries.

Finally, the Green Zone consists of 233 assets, making up 31.5% of our coverage. These stocks are trading near their historical peaks or have successfully navigated recent drawdown cycles. The fact that less than a third of the market occupies the Green Zone suggests that the majority of equities are still grappling with significant price overhead.

Zone Movement and Market Velocity

The velocity of movement between zones during April 2026 was remarkably high. We tracked 152 stocks that entered the Red Zone this month. This influx suggests that new pockets of weakness are emerging, particularly in sectors that had previously shown resilience.

Conversely, 191 stocks exited the Red Zone during this period. This exit rate is one of the more optimistic data points in our current set. It indicates that nearly 200 companies have begun to repair their technical damage or have reached a price floor that satisfies our recovery criteria.

The Yellow Zone also saw high activity with 204 stocks entering this transitional phase. This high volume of movement into the Yellow Zone confirms that the market is not static. We are witnessing a massive reshuffling of risk as investors rotate out of high-valuation growth and into distressed value or defensive positions.

Deep Dive: Top Severity Scores

Our severity score is a composite metric that factors in the depth of the drawdown, the duration of the decline, and the velocity of the price drop. At the top of our list is NNDM (Nano Dimension Ltd.), which maintains a severity score of 19.5. This asset is currently down -98.1% from its peak.

The duration of the NNDM drawdown has now reached 3650 days. This represents a decade of consistent underperformance and capital erosion. The extreme severity score reflects the near-total loss of value and the immense time required for any meaningful recovery to occur.

AIG (American International Group, Inc.) follows closely with a severity score of 18.9. While the percentage decline of -93.9% is slightly less than NNDM, the duration is staggering. AIG has been in a state of drawdown for 9262 days. This reflects deep-seated structural changes in the company over decades of market cycles.

PayPal Holdings, Inc. (PYPL) remains a significant concern in our data with a severity score of 18.4. The stock is down -83.7% over a period of 1686 days. Unlike the decades-long drawdowns of AIG, the PayPal decline is a more recent phenomenon related to the post-2021 fintech contraction. The high severity score despite a shorter duration highlights the sheer speed of the wealth destruction in this name.

PG&E Corporation (PCG) holds a severity score of 18.1. It is down -76.4% over 3106 days. This utility provider represents a different type of risk, where regulatory and environmental liabilities create long-term price suppression. The duration of over eight years indicates a chronic inability to return to previous highs.

EPAM Systems, Inc. rounds out our top five with a severity score of 18.0. The stock is down -84.1% over 1587 days. Similar to PayPal, EPAM represents the severe de-rating of high-growth technology services. The severity of this drawdown is particularly notable given the company's previously strong fundamental reputation.

Approaching the Red Zone

We are closely monitoring a group of stocks that are currently hovering just outside the Red Zone. These assets have severity scores between 4.0 and 5.0. HAL (Halliburton) and OMC (Omnicom Group) both sit at a severity of 5.0. These companies are on the precipice of a more serious technical breakdown.

ALLE (Allegion), MP (MP Materials), and RSG (Republic Services) all carry a severity score of 4.9. These stocks have shown increasing weakness throughout April. If the current price trends continue into May, we expect these five assets to transition into the Red Zone.

The presence of RSG in this list is particularly interesting. As a waste management company, Republic Services is typically viewed as a defensive play. A rising severity score in this sector often signals a broader exhaustion in the market where even the "safe" havens begin to see selling pressure.

Sector Patterns and Stress Indicators

Our data reveals clear sectoral divides in the current market environment. The technology and fintech sectors continue to dominate the high-severity rankings. Companies like PYPL, EPAM, and PD (PagerDuty, Inc.) illustrate the ongoing struggle for former software darlings to find a sustainable bottom.

The real estate sector is also showing signs of deep distress. ARE (Alexandria Real Estate Equities, Inc.) has a severity score of 17.8 and is down -78.5% over 1535 days. This reflects the broader challenges in the commercial and specialized real estate markets as interest rates and occupancy patterns shift.

In contrast, the communications sector shows a split profile. CHTR (Charter Communications, Inc.) carries a high severity of 17.7 with a -79.9% decline. Meanwhile, newer media entities like PSKY (Paramount Skydance Corporation) are also struggling with a severity of 17.3 and a -88.6% drawdown. This suggests that the entire media and distribution landscape is undergoing a painful re-valuation.

Month-Over-Month Trend Analysis

When we compare April 2026 to the previous month, we see a slight increase in total market stress. Although 191 stocks exited the Red Zone, the 152 new entries are coming from higher-quality cohorts. This suggests that the "pain" is rotating from speculative assets into more established companies.

The average severity score of 5.4 has remained relatively stable, but the internal composition of that score is changing. We see shorter-duration, high-velocity drawdowns becoming more common. This is a shift from the long-term, slow-grind drawdowns that characterized the previous two years.

We also observe that the Green Zone has shrunk by 2.1% since the start of the quarter. This contraction indicates that fewer stocks are participating in the market's attempts to reach new highs. A narrowing Green Zone often precedes a broader market correction.

Detailed Analysis of the Bottom Decile

The bottom decile of our tracked assets, represented by the highest severity scores, shows a lack of recovery momentum. LU (Lufax Holding Ltd), with a severity of 16.7 and a decline of -93.4%, has been in a drawdown for 1990 days. This asset, along with others in the top ten, shows no signs of breaking its long-term downward trend.

PagerDuty, Inc. (PD) is another example of a high-severity asset that continues to languish. With a score of 16.8 and a decline of -88.4% over 2456 days, it represents the "zombie" state of many mid-cap tech stocks. These companies remain stuck in the Red Zone because their previous peaks were driven by valuation multiples that the current market refuses to grant.

We find that the average time in drawdown for our top ten most severe assets is 3144 days. This is roughly 8.6 years. This data point is crucial because it reminds us that some drawdowns are not temporary dips but permanent shifts in the valuation of a business.

Looking Ahead to May 2026

As we move into May, we will focus on the 204 stocks that recently entered the Yellow Zone. This group will determine the market's direction for the second quarter. If these assets can stabilize and move toward the Green Zone, the average severity score will likely drop below 5.0.

However, if the stocks currently approaching the Red Zone, such as HAL and OMC, continue to deteriorate, we may see the Red Zone percentage climb back toward 45%. We are also watching the 43.6% of assets currently in the Red Zone to see if the exit rate of 191 stocks per month can be sustained.

The key metric to watch will be the "Exit-to-Entry" ratio for the Red Zone. In April, this ratio was 1.25, meaning for every 100 stocks that entered the Red Zone, 125 exited. This is a positive sign of internal market repair. We will monitor if this ratio stays above 1.0 in the coming weeks.

We also expect to see further volatility in the severity scores of the top ten assets. As NNDM approaches the 3700-day mark, its severity score will likely continue to climb unless a massive price reversal occurs. We use these extreme cases as a benchmark for the worst-case scenarios in the current equity environment.

Our analysis suggests that while the market is showing signs of healing in some areas, the depth of the drawdowns in the Red Zone remains historically high. Investors are dealing with a market where 43.6% of assets are still significantly impaired. We will continue to track these 740 assets daily to provide the most accurate drawdown data available.

The stability of the average severity at 5.4 suggests a market in equilibrium, but it is an equilibrium of high stress. We believe the coming month will reveal whether the 191 stocks that exited the Red Zone can maintain their recovery or if they will be pulled back into the Yellow Zone by broader macro pressures.

We remain committed to providing objective data on these price contractions. The movement of 152 stocks into the Red Zone this month serves as a reminder that risk is always present, even when broader indices appear calm. We will provide our next full update at the end of May.