Moving Average Indicators for DRI

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From the Weekend Report 3/5/2010: The phase of the 200 day Simple Moving Average was hardly altered during the week.

Recent Averages with Candlestick Chart. of Darden Restaurants

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This page looks at the predictive abilities of different methods of averaging applied to DRI stock prices. Techniques available include moving weighted or exponential averages of various periods and the family of MACD (Moving Average Convergence Divergence) indicators.

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 DRI 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. Commonly, speculators will use exponential averages or weighting techniques to emphasize the most recent data. But past a certain point, such front weighting can dramatically increase false signals. Norman G. Fosback has noted that legitimate signals of this sort will normally be evident through a variety of averaging methods.

Companies In the News

Friday, March 12, 2010: We have news on ConAgra Foods, Inc., ticker symbol CAG. Signs of an over-bought condition have become noticable. Also, there are breaking events concerning Fluor Corporation (NEW) and Amgen, Inc..

From the News Archive: (3/11/2010 ) Favorable events happened at Walgreen Company, Zimmer Holdings, Inc., and GameStop Corp.. Meanwhile, bad news came from Southwestern Energy Company.

MACD analysis can use any of an infinite number of averaging methods and coefficients. Also, 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 - 13 instances
Future30SesAvgClose	2.96 % minus 1.21 % = 1.75 %	14.78 %
Future5SesAvgClose	1.36 % minus 0.23 % = 1.13 %	57.39 %
Future2SesAvgClose	1.29 % minus 0.12 % = 1.18 %	149.54 %
Sell Signals - 13 instances
Future30SesAvgClose	2.21 % minus 1.21 % = 0.99 %	8.39 %
Future5SesAvgClose	0.65 % minus 0.23 % = 0.41 %	21.07 %
Future2SesAvgClose	0.00 % minus 0.12 % = -0.12 %	-14.87 %
	.
Moving Avg. 5/20 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 103 instances
Future30SesAvgClose	1.48 % minus 1.21 % = 0.27 %	2.24 %
Future5SesAvgClose	0.16 % minus 0.23 % = -0.07 %	-3.45 %
Future2SesAvgClose	0.28 % minus 0.12 % = 0.17 %	21.24 %
Sell Signals - 104 instances
Future30SesAvgClose	1.20 % minus 1.21 % = -0.02 %	-0.14 %
Future5SesAvgClose	0.14 % minus 0.23 % = -0.09 %	-4.67 %
Future2SesAvgClose	0.16 % minus 0.12 % = 0.05 %	5.79 %
	.
Moving Avg. 5/200 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 21 instances
Future30SesAvgClose	3.59 % minus 1.21 % = 2.38 %	20.14 %
Future5SesAvgClose	0.60 % minus 0.23 % = 0.37 %	18.88 %
Future2SesAvgClose	0.23 % minus 0.12 % = 0.11 %	14.57 %
Sell Signals - 21 instances
Future30SesAvgClose	3.38 % minus 1.21 % = 2.17 %	18.36 %
Future5SesAvgClose	1.65 % minus 0.23 % = 1.42 %	72.12 %
Future2SesAvgClose	1.14 % minus 0.12 % = 1.03 %	130.31 %
	.
MACD 12/26 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 358 instances
Future30SesAvgClose	1.19 % minus 1.21 % = -0.03 %	-0.22 %
Future5SesAvgClose	0.35 % minus 0.23 % = 0.12 %	6.16 %
Future2SesAvgClose	0.10 % minus 0.12 % = -0.01 %	-1.56 %
Sell Signals - 357 instances
Future30SesAvgClose	0.93 % minus 1.21 % = -0.28 %	-2.37 %
Future5SesAvgClose	0.23 % minus 0.23 % = 0.00 %	-0.20 %
Future2SesAvgClose	0.17 % minus 0.12 % = 0.06 %	7.30 %
	.
MACD 12/26 Signal	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 490 instances
Future30SesAvgClose	0.77 % minus 1.21 % = -0.45 %	-3.77 %
Future5SesAvgClose	-0.02 % minus 0.23 % = -0.25 %	-12.70 %
Future2SesAvgClose	-0.03 % minus 0.12 % = -0.15 %	-18.50 %
Sell Signals - 490 instances
Future30SesAvgClose	1.07 % minus 1.21 % = -0.14 %	-1.21 %
Future5SesAvgClose	0.17 % minus 0.23 % = -0.06 %	-3.26 %
Future2SesAvgClose	0.07 % minus 0.12 % = -0.05 %	-5.80 %
	.
Calibrated M by Q Half Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 208 instances
Future30SesAvgClose	0.68 % minus 1.21 % = -0.53 %	-4.50 %
Future5SesAvgClose	-0.26 % minus 0.23 % = -0.49 %	-24.96 %
Future2SesAvgClose	-0.18 % minus 0.12 % = -0.29 %	-37.01 %
Sell Signals - 206 instances
Future30SesAvgClose	1.09 % minus 1.21 % = -0.13 %	-1.06 %
Future5SesAvgClose	-0.14 % minus 0.23 % = -0.37 %	-18.67 %
Future2SesAvgClose	-0.21 % minus 0.12 % = -0.32 %	-40.95 %
	.
Calibrated M by Q Full Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 141 instances
Future30SesAvgClose	1.25 % minus 1.21 % = 0.03 %	0.26 %
Future5SesAvgClose	0.22 % minus 0.23 % = -0.01 %	-0.48 %
Future2SesAvgClose	0.06 % minus 0.12 % = -0.05 %	-6.94 %
Sell Signals - 141 instances
Future30SesAvgClose	1.68 % minus 1.21 % = 0.47 %	3.95 %
Future5SesAvgClose	0.71 % minus 0.23 % = 0.48 %	24.20 %
Future2SesAvgClose	0.55 % minus 0.12 % = 0.43 %	54.96 %
	.
Projected Crossing of SMA 20/200.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 17 instances
Future30SesAvgClose	2.53 % minus 1.21 % = 1.32 %	11.15 %
Future5SesAvgClose	0.68 % minus 0.23 % = 0.45 %	22.65 %
Future2SesAvgClose	-0.09 % minus 0.12 % = -0.21 %	-26.37 %
Sell Signals - 15 instances
Future30SesAvgClose	-0.39 % minus 1.21 % = -1.60 %	-13.59 %
Future5SesAvgClose	-0.18 % minus 0.23 % = -0.41 %	-20.68 %
Future2SesAvgClose	-0.08 % minus 0.12 % = -0.20 %	-25.35 %
	.
Projected Crossing of SMA 5/20.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 109 instances
Future30SesAvgClose	1.12 % minus 1.21 % = -0.10 %	-0.81 %
Future5SesAvgClose	0.16 % minus 0.23 % = -0.07 %	-3.40 %
Future2SesAvgClose	0.09 % minus 0.12 % = -0.02 %	-3.11 %
Sell Signals - 104 instances
Future30SesAvgClose	1.84 % minus 1.21 % = 0.63 %	5.29 %
Future5SesAvgClose	0.75 % minus 0.23 % = 0.52 %	26.24 %
Future2SesAvgClose	0.49 % minus 0.12 % = 0.38 %	47.90 %
	.

The best buy signal for 30 future sessions was 2.38 % from the Moving Avg. 5/200 Divergence,and the best sell signal for was -1.60 % from the Projected Crossing of SMA 20/200..

For 5 future sessions the best buy signal was 1.13 % from the Moving Avg. 20/200 Divergence,and the best sell signal was -0.41 % from the Projected Crossing of SMA 20/200..

The best buy signal for 2 future sessions was 1.18 % from the Moving Avg. 20/200 Divergence,and the best sell signal was -0.32 % from the Calibrated M by Q Half Cycle Moving Avg..

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Moving Average Indicators for Darden Restaurants