Moving Average Analysis of ASH

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From the Weekend Report 11/5/2010: There has not been much change in the phase of the 200 day moving average since this time last week.

ASH: Recent Averages with Candlestick Chart.

More than 70 Hi-Rez charts daily for Ashland Inc.:

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Different ways of averaging are tested on ASH stock prices for their ability to predict trend movements. An infinite selection of moving average techniques is available, including but not limited to moving weighted and exponentional averages and MACD indicators of various flavors.

Unfortunately, some of the most popular indicators of this type can prove to be the worst forcasting indicators. The effectiveness of these methods as applied to ASH stock price trend evaluation is tested on the next page.

Green is the 20 bar moving average, while the 200 session average is red. Often the simple unweighted moving averages seen in this plot will give a more accurate indicator, with fewer false signals than some of the supposedly more sophisticated techniques that we test below. It is always possible to fine tune an exponential or other weighted average so that it seems to outperform a simple average in a given situation. However, over-tuning can increase false and misleading indicators. A good un-ambiguous signal will be noticable through a variety of averaging methods, including some of the most simple.

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MACD analysis is dangerously suited for overtuning, since it may use any of an infinite number of averaging methods and coefficients. In addition to crossover signals based on moving averages, many analysts add a trigger line which is based on some average of the first two averages. Here we depict the results of 12 and 26 session Exponential Moving Averages. The exponential coefficient used here is .18. There is nothing magic about these parameters, but these are frequently seen.

Float the cursor for a longer term chart.

Moving Average Convergence Divergence, or MACD, produces buy or sell signal that are color tinted here.

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Moving Avg. 20/200 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 32 instances
Future30SesAvgClose	1.37 % minus 0.89 % = 0.47 %	4.01 %
Future5SesAvgClose	0.02 % minus 0.15 % = -0.13 %	-6.81 %
Future2SesAvgClose	0.29 % minus 0.07 % = 0.21 %	27.28 %
Sell Signals - 31 instances
Future30SesAvgClose	-0.80 % minus 0.89 % = -1.69 %	-14.31 %
Future5SesAvgClose	-1.38 % minus 0.15 % = -1.53 %	-77.89 %
Future2SesAvgClose	-0.81 % minus 0.07 % = -0.89 %	-112.52 %
	.
Moving Avg. 5/20 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 181 instances
Future30SesAvgClose	0.60 % minus 0.89 % = -0.29 %	-2.46 %
Future5SesAvgClose	0.08 % minus 0.15 % = -0.07 %	-3.74 %
Future2SesAvgClose	-0.04 % minus 0.07 % = -0.11 %	-13.97 %
Sell Signals - 180 instances
Future30SesAvgClose	1.06 % minus 0.89 % = 0.17 %	1.43 %
Future5SesAvgClose	0.04 % minus 0.15 % = -0.11 %	-5.61 %
Future2SesAvgClose	-0.05 % minus 0.07 % = -0.12 %	-15.52 %
	.
Moving Avg. 5/200 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 54 instances
Future30SesAvgClose	1.61 % minus 0.89 % = 0.71 %	6.04 %
Future5SesAvgClose	0.48 % minus 0.15 % = 0.33 %	16.53 %
Future2SesAvgClose	0.37 % minus 0.07 % = 0.29 %	37.26 %
Sell Signals - 53 instances
Future30SesAvgClose	1.19 % minus 0.89 % = 0.29 %	2.49 %
Future5SesAvgClose	0.81 % minus 0.15 % = 0.66 %	33.55 %
Future2SesAvgClose	0.56 % minus 0.07 % = 0.48 %	61.14 %
	.
MACD 12/26 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 631 instances
Future30SesAvgClose	0.67 % minus 0.89 % = -0.22 %	-1.88 %
Future5SesAvgClose	0.15 % minus 0.15 % = 0.00 %	0.01 %
Future2SesAvgClose	0.08 % minus 0.07 % = 0.01 %	0.72 %
Sell Signals - 631 instances
Future30SesAvgClose	0.63 % minus 0.89 % = -0.27 %	-2.25 %
Future5SesAvgClose	0.04 % minus 0.15 % = -0.11 %	-5.78 %
Future2SesAvgClose	-0.08 % minus 0.07 % = -0.15 %	-19.11 %
	.
MACD 12/26 Signal	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 871 instances
Future30SesAvgClose	0.60 % minus 0.89 % = -0.29 %	-2.49 %
Future5SesAvgClose	0.13 % minus 0.15 % = -0.02 %	-1.11 %
Future2SesAvgClose	0.11 % minus 0.07 % = 0.04 %	4.76 %
Sell Signals - 870 instances
Future30SesAvgClose	0.51 % minus 0.89 % = -0.39 %	-3.28 %
Future5SesAvgClose	0.05 % minus 0.15 % = -0.10 %	-5.21 %
Future2SesAvgClose	0.07 % minus 0.07 % = 0.00 %	-0.29 %
	.
Calibrated M by Q Half Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 333 instances
Future30SesAvgClose	0.90 % minus 0.89 % = 0.00 %	0.03 %
Future5SesAvgClose	0.22 % minus 0.15 % = 0.07 %	3.32 %
Future2SesAvgClose	0.10 % minus 0.07 % = 0.03 %	3.61 %
Sell Signals - 333 instances
Future30SesAvgClose	0.44 % minus 0.89 % = -0.45 %	-3.79 %
Future5SesAvgClose	0.12 % minus 0.15 % = -0.03 %	-1.49 %
Future2SesAvgClose	0.02 % minus 0.07 % = -0.05 %	-6.43 %
	.
Calibrated M by Q Full Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 228 instances
Future30SesAvgClose	1.22 % minus 0.89 % = 0.33 %	2.78 %
Future5SesAvgClose	0.15 % minus 0.15 % = 0.00 %	-0.20 %
Future2SesAvgClose	0.10 % minus 0.07 % = 0.02 %	2.98 %
Sell Signals - 229 instances
Future30SesAvgClose	0.65 % minus 0.89 % = -0.25 %	-2.09 %
Future5SesAvgClose	-0.02 % minus 0.15 % = -0.17 %	-8.72 %
Future2SesAvgClose	-0.10 % minus 0.07 % = -0.17 %	-21.97 %
	.
Projected Crossing of SMA 20/200.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 37 instances
Future30SesAvgClose	0.79 % minus 0.89 % = -0.10 %	-0.83 %
Future5SesAvgClose	0.67 % minus 0.15 % = 0.52 %	26.65 %
Future2SesAvgClose	0.56 % minus 0.07 % = 0.49 %	62.02 %
Sell Signals - 34 instances
Future30SesAvgClose	0.05 % minus 0.89 % = -0.84 %	-7.13 %
Future5SesAvgClose	0.47 % minus 0.15 % = 0.32 %	16.42 %
Future2SesAvgClose	0.13 % minus 0.07 % = 0.06 %	7.21 %
	.
Projected Crossing of SMA 5/20.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 224 instances
Future30SesAvgClose	0.61 % minus 0.89 % = -0.29 %	-2.41 %
Future5SesAvgClose	0.14 % minus 0.15 % = -0.01 %	-0.52 %
Future2SesAvgClose	0.11 % minus 0.07 % = 0.04 %	5.22 %
Sell Signals - 206 instances
Future30SesAvgClose	0.47 % minus 0.89 % = -0.42 %	-3.58 %
Future5SesAvgClose	0.09 % minus 0.15 % = -0.06 %	-3.09 %
Future2SesAvgClose	0.06 % minus 0.07 % = -0.01 %	-1.54 %
	.

The best buy signal for 30 future sessions was 0.71 % from the Moving Avg. 5/200 Divergence,and the best sell signal for was -1.69 % from the Moving Avg. 20/200 Divergence.

For 5 future sessions the best buy signal was 0.52 % from the Projected Crossing of SMA 20/200.,and the best sell signal was -1.53 % from the Moving Avg. 20/200 Divergence.

The best buy signal for 2 future sessions was 0.49 % from the Projected Crossing of SMA 20/200.,and the best sell signal was -0.89 % from the Moving Avg. 20/200 Divergence.

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