Moving Average Analysis of ECL

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From the Weekend Report 6/25/2010: ECL is now in phase two of the oscillation cycle around the 200 session average. The price is 1.00 % above the line, but some convergence has taken place during the week.

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This page looks at the predictive abilities of different methods of averaging applied to ECL 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 ECL stock price trend evaluation is tested on the next page.

The 200 session average is red, the 20 bar, green. The un-sophisticated moving averages plotted here are un-weighted, but they still may return better results than many of the more popular, highly tuned averages seen in some of the following sections. 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, July 30, 2010: We have news on Janus Capital Group Inc., ticker symbol JNS. Signs of an over-bought condition have become noticable. Also, there are breaking events concerning Akamai Technologies, Inc. and Cummins Inc..

From the News Archive: (7/28/2010 ) A favorable event happened at Quest Diagnostics Incorporated. Meanwhile, bad news came from W.W. Grainger, Inc., Abbott Laboratories, and Dupont.

MACD analysis would appear perfect for overtuning, since it may use any of an infinite number of averaging methods and coefficients. In addition to crossover signals from various moving averages, analysts frequently add a trigger line 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 - 25 instances
Future30SesAvgClose	2.17 % minus 1.08 % = 1.08 %	9.18 %
Future5SesAvgClose	1.36 % minus 0.22 % = 1.14 %	58.10 %
Future2SesAvgClose	1.00 % minus 0.11 % = 0.89 %	113.03 %
Sell Signals - 25 instances
Future30SesAvgClose	-0.45 % minus 1.08 % = -1.54 %	-13.03 %
Future5SesAvgClose	-0.38 % minus 0.22 % = -0.60 %	-30.53 %
Future2SesAvgClose	-0.53 % minus 0.11 % = -0.64 %	-81.90 %
	.
Moving Avg. 5/20 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 170 instances
Future30SesAvgClose	0.84 % minus 1.08 % = -0.25 %	-2.10 %
Future5SesAvgClose	0.00 % minus 0.22 % = -0.22 %	-11.38 %
Future2SesAvgClose	0.05 % minus 0.11 % = -0.06 %	-7.26 %
Sell Signals - 169 instances
Future30SesAvgClose	0.83 % minus 1.08 % = -0.26 %	-2.16 %
Future5SesAvgClose	0.30 % minus 0.22 % = 0.09 %	4.33 %
Future2SesAvgClose	0.20 % minus 0.11 % = 0.08 %	10.78 %
	.
Moving Avg. 5/200 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 40 instances
Future30SesAvgClose	0.82 % minus 1.08 % = -0.27 %	-2.25 %
Future5SesAvgClose	-0.18 % minus 0.22 % = -0.40 %	-20.11 %
Future2SesAvgClose	-0.11 % minus 0.11 % = -0.22 %	-28.18 %
Sell Signals - 40 instances
Future30SesAvgClose	-0.23 % minus 1.08 % = -1.31 %	-11.12 %
Future5SesAvgClose	0.19 % minus 0.22 % = -0.03 %	-1.41 %
Future2SesAvgClose	0.40 % minus 0.11 % = 0.29 %	36.88 %
	.
MACD 12/26 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 593 instances
Future30SesAvgClose	0.91 % minus 1.08 % = -0.18 %	-1.51 %
Future5SesAvgClose	0.19 % minus 0.22 % = -0.03 %	-1.70 %
Future2SesAvgClose	0.04 % minus 0.11 % = -0.07 %	-8.70 %
Sell Signals - 594 instances
Future30SesAvgClose	0.85 % minus 1.08 % = -0.23 %	-1.97 %
Future5SesAvgClose	0.15 % minus 0.22 % = -0.06 %	-3.30 %
Future2SesAvgClose	0.11 % minus 0.11 % = 0.00 %	0.15 %
	.
MACD 12/26 Signal	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 749 instances
Future30SesAvgClose	1.10 % minus 1.08 % = 0.02 %	0.14 %
Future5SesAvgClose	0.22 % minus 0.22 % = 0.00 %	-0.09 %
Future2SesAvgClose	0.14 % minus 0.11 % = 0.03 %	4.20 %
Sell Signals - 748 instances
Future30SesAvgClose	1.14 % minus 1.08 % = 0.05 %	0.43 %
Future5SesAvgClose	0.21 % minus 0.22 % = 0.00 %	-0.21 %
Future2SesAvgClose	0.07 % minus 0.11 % = -0.04 %	-4.83 %
	.
Calibrated M by Q Half Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 316 instances
Future30SesAvgClose	0.76 % minus 1.08 % = -0.32 %	-2.75 %
Future5SesAvgClose	0.06 % minus 0.22 % = -0.16 %	-7.88 %
Future2SesAvgClose	0.07 % minus 0.11 % = -0.04 %	-4.77 %
Sell Signals - 316 instances
Future30SesAvgClose	0.83 % minus 1.08 % = -0.25 %	-2.13 %
Future5SesAvgClose	0.14 % minus 0.22 % = -0.08 %	-3.94 %
Future2SesAvgClose	0.11 % minus 0.11 % = 0.00 %	-0.38 %
	.
Calibrated M by Q Full Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 221 instances
Future30SesAvgClose	0.75 % minus 1.08 % = -0.34 %	-2.85 %
Future5SesAvgClose	0.13 % minus 0.22 % = -0.09 %	-4.74 %
Future2SesAvgClose	0.02 % minus 0.11 % = -0.09 %	-11.55 %
Sell Signals - 221 instances
Future30SesAvgClose	0.93 % minus 1.08 % = -0.15 %	-1.29 %
Future5SesAvgClose	0.09 % minus 0.22 % = -0.13 %	-6.45 %
Future2SesAvgClose	0.00 % minus 0.11 % = -0.11 %	-14.11 %
	.
Projected Crossing of SMA 20/200.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 29 instances
Future30SesAvgClose	3.27 % minus 1.08 % = 2.18 %	18.48 %
Future5SesAvgClose	0.93 % minus 0.22 % = 0.71 %	36.08 %
Future2SesAvgClose	0.41 % minus 0.11 % = 0.30 %	38.12 %
Sell Signals - 30 instances
Future30SesAvgClose	1.20 % minus 1.08 % = 0.11 %	0.96 %
Future5SesAvgClose	0.50 % minus 0.22 % = 0.28 %	14.12 %
Future2SesAvgClose	0.16 % minus 0.11 % = 0.05 %	5.89 %
	.
Projected Crossing of SMA 5/20.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 206 instances
Future30SesAvgClose	0.80 % minus 1.08 % = -0.29 %	-2.43 %
Future5SesAvgClose	0.26 % minus 0.22 % = 0.04 %	1.92 %
Future2SesAvgClose	0.26 % minus 0.11 % = 0.15 %	19.14 %
Sell Signals - 164 instances
Future30SesAvgClose	1.34 % minus 1.08 % = 0.26 %	2.17 %
Future5SesAvgClose	0.28 % minus 0.22 % = 0.07 %	3.33 %
Future2SesAvgClose	0.19 % minus 0.11 % = 0.08 %	10.43 %
	.

The best buy signal for 30 future sessions was 2.18 % from the Projected Crossing of SMA 20/200.,and the best sell signal for was -1.54 % from the Moving Avg. 20/200 Divergence.

For 5 future sessions the best buy signal was 1.14 % from the Moving Avg. 20/200 Divergence,and the best sell signal was -0.64 % from the Moving Avg. 20/200 Divergence.

The best buy signal for 2 future sessions was 0.89 % from the Moving Avg. 20/200 Divergence,and the best sell signal was -0.64 % from the Moving Avg. 20/200 Divergence.

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Ecolab Inc. Moving Averages - ECL