There are many different technical indicators. In this assignment, we will concentrate on just one, the simple moving average. However, feel free to investigate and use whatever technical indicators you find and desire to use. When the 50-day moving average goes above the 200-day moving average, that is supposed to be a bullish sign that the stock price is going to rise. Likewise, when the 50-day moving average goes below the 200-day moving average, that supposedly means the stock price is going to fall. These events are called "crosses" or "inflection points." The supposedly bullish event is called the "golden cross" and the supposedly bearish event is called a "death cross." Research Citigroup (C) at Yahoo or Marketwatch or any other website offering free charting and technical analysis and research. See the Technical Analysis presentation for Yahoo. If you find another website that offers free technical analysis and if you think it is far superior to Yahoo or Marketwatch, please contact me. Choose a 5-year (5y) chart and then add both a 50-day simple moving average and a 200-day simple moving average. Sample Analyses: (Choose these or make up your own. Read the Disclaimer below.) 1) In June of 2020, the 50-day moving average went below the 200-day moving average. That is supposed to be a sell signal. Was this a good time to sell? 2) In September of 2021, the 50-day moving average went above the 200-day moving average. Was this a good time to buy? 3) In May of 2022, the 50-day moving average went below the 200-day moving average. Was this a good time to sell? 4) Comment on the current relationship of the 50-day moving average and the 200-day moving average. What about the past few weeks or months? What would you do now? Comment on whether the stock is a buy, sell, or neutral. 5) Add the 15-day moving average. Compare the 15-day moving average with the 50-day moving average. Look at the same time periods as #1, #2, and #3 above. Was the relationship of the 15-day moving average and 50-day moving average a better indicator of the near-term future price movements of the stock? 6) Do the same for a stock of your choice. (Other suggested stocks: BAC, K, KSS, HMC, PM, TM, VZ, X) 7) Comment on the effectiveness of the simple moving average technical indicators. Would you try buying and selling stocks based on technical analysis? By the way, what do you think the D's across the bottom of the chart signify? Disclaimer: Remember that with technical analysis, you do not have to actually know what you are doing. You just have to convince others that you know what you are doing! So do your best to convince me that you know what you are doing even though you don't. Since I also don't know what I am doing when it comes to technical analysis, it will be easy to convince me. Who knows? You may find that you are good at convincing others that you know what you are doing, even though you don't. And if this is true, you can make a whole lot of money in the Wonderful Wild World of Technical Analysis! Could there be a $500,000 per year salary (plus bonuses!) waiting for you on Wall Street? Hmmm?

There are many different technical indicators. In this assignment, we will concentrate on just one, the simple moving average. However, feel free to investigate and use whatever technical indicators you find and desire to use. When the 50-day moving average goes above the 200-day moving average, that is supposed to be a bullish sign that the stock price is going to rise. Likewise, when the 50-day moving average goes below the 200-day moving average, that supposedly means the stock price is going to fall. These events are called "crosses" or "inflection points." The supposedly bullish event is called the "golden cross" and the supposedly bearish event is called a "death cross." Research Citigroup (C) at Yahoo or Marketwatch or any other website offering free charting and technical analysis and research. See the Technical Analysis presentation for Yahoo. If you find another website that offers free technical analysis and if you think it is far superior to Yahoo or Marketwatch, please contact me. Choose a 5-year (5y) chart and then add both a 50-day simple moving average and a 200-day simple moving average. Sample Analyses: (Choose these or make up your own. Read the Disclaimer below.) 1) In June of 2020, the 50-day moving average went below the 200-day moving average. That is supposed to be a sell signal. Was this a good time to sell? 2) In September of 2021, the 50-day moving average went above the 200-day moving average. Was this a good time to buy? 3) In May of 2022, the 50-day moving average went below the 200-day moving average. Was this a good time to sell? 4) Comment on the current relationship of the 50-day moving average and the 200-day moving average. What about the past few weeks or months? What would you do now? Comment on whether the stock is a buy, sell, or neutral. 5) Add the 15-day moving average. Compare the 15-day moving average with the 50-day moving average. Look at the same time periods as #1, #2, and #3 above. Was the relationship of the 15-day moving average and 50-day moving average a better indicator of the near-term future price movements of the stock? 6) Do the same for a stock of your choice. (Other suggested stocks: BAC, K, KSS, HMC, PM, TM, VZ, X) 7) Comment on the effectiveness of the simple moving average technical indicators. Would you try buying and selling stocks based on technical analysis? By the way, what do you think the D's across the bottom of the chart signify? Disclaimer: Remember that with technical analysis, you do not have to actually know what you are doing. You just have to convince others that you know what you are doing! So do your best to convince me that you know what you are doing even though you don't. Since I also don't know what I am doing when it comes to technical analysis, it will be easy to convince me. Who knows? You may find that you are good at convincing others that you know what you are doing, even though you don't. And if this is true, you can make a whole lot of money in the Wonderful Wild World of Technical Analysis! Could there be a $500,000 per year salary (plus bonuses!) waiting for you on Wall Street? Hmmm?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter25: Portfolio Theory And Asset Pricing Models

Section: Chapter Questions

Problem 5MC: You have been hired at the investment firm of Bowers Noon. One of its clients doesnt understand the...

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