3. MOVING AVERAGES Let\'s look at moving averages as they are the most popular a
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3. MOVING AVERAGES Let's look at moving averages as they are the most popular and well known technical analysis tool. Click on http://stockcharts.com/education/IndicatorAnalysis/indic movingAvg.htm to get an overview. Calculate a four period moving average for the following weekly closing prices of ABC stock during a six month period. (Period was chosen at random.) Week Price Week Price 61.19 61.26 67.00 62.91 62.80 64.65 66.09 65.28 63.91 63.98 61.95 62.80 62.67 61.60 15 61.83 63.10 62.69 60.94 62.34 63.23 21 63.95 63.36 64.08 63.55 63.78 26 63.01 27 6382 16 17 18 19 20 23 24 25 10 12 13 14 the average of the b. Calculate how much you would have made or lost from the above rule the stock from day 1.Explanation / Answer
Week Price Moving Average 4 period 1.00 61.19 2.00 61.26 3.00 67.00 Formula for 4th week =( 61.19+61.26+67.00+62.91)/4 4.00 62.91 63.09 Formula for 5th week =( 61.26+67.00+62.91+62.80)/4 5.00 62.80 63.49 and so on 6.00 64.65 64.34 7.00 66.09 64.11 8.00 65.28 64.71 9.00 63.91 64.98 10.00 63.98 64.82 11.00 61.95 63.78 12.00 62.80 63.16 13.00 62.67 62.85 14.00 61.60 62.26 15.00 61.83 62.23 16.00 63.10 62.30 17.00 62.69 62.31 18.00 60.94 62.14 19.00 62.34 62.27 20.00 63.23 62.30 21.00 63.95 62.62 22.00 63.36 63.22 23.00 64.08 63.66 24.00 63.55 63.74 25.00 63.78 63.69 26.00 63.01 63.61 27.00 63.82 63.54 Formula for 4th week =( 61.19+61.26+67.00+62.91)/4 Formula for 5th week =( 61.26+67.00+62.91+62.80)/4 and so on
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