Moving Average Indicators for EDS

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From the Weekend Report 8/22/2008: The phase of the 200 day Simple Moving Average was hardly altered during the week.

EDS: Recent Averages with Candlestick Chart.

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This page looks at the predictive abilities of different methods of averaging applied to EDS 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 next page tests the effectiveness of these methods as predictors of future prices for EDS.

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. 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. 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
	In the news, Wednesday, July 01, 2009: An unfavorable condition has developed with Lexmark International, Inc., ticker symbol LXK. Also, there are breaking events concerning Lennar Corporation (LEN) and The Travelers Companies, Inc. (TRV)

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 - 23 instances
Future30SesAvgClose	0.34 % minus 0.97 % = -0.63 %	-5.32 %
Future5SesAvgClose	0.34 % minus 0.19 % = 0.15 %	7.62 %
Future2SesAvgClose	0.16 % minus 0.09 % = 0.06 %	7.69 %
Sell Signals - 23 instances
Future30SesAvgClose	-0.59 % minus 0.97 % = -1.55 %	-13.16 %
Future5SesAvgClose	-0.55 % minus 0.19 % = -0.75 %	-37.85 %
Future2SesAvgClose	-0.16 % minus 0.09 % = -0.25 %	-32.34 %
	.
Moving Avg. 5/20 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 173 instances
Future30SesAvgClose	0.85 % minus 0.97 % = -0.12 %	-0.99 %
Future5SesAvgClose	0.56 % minus 0.19 % = 0.37 %	18.71 %
Future2SesAvgClose	0.44 % minus 0.09 % = 0.34 %	43.40 %
Sell Signals - 174 instances
Future30SesAvgClose	1.19 % minus 0.97 % = 0.22 %	1.90 %
Future5SesAvgClose	0.36 % minus 0.19 % = 0.17 %	8.39 %
Future2SesAvgClose	0.09 % minus 0.09 % = 0.00 %	-0.27 %
	.
Moving Avg. 5/200 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 36 instances
Future30SesAvgClose	0.13 % minus 0.97 % = -0.83 %	-7.06 %
Future5SesAvgClose	-0.55 % minus 0.19 % = -0.74 %	-37.60 %
Future2SesAvgClose	-0.23 % minus 0.09 % = -0.33 %	-41.45 %
Sell Signals - 36 instances
Future30SesAvgClose	-0.92 % minus 0.97 % = -1.89 %	-15.97 %
Future5SesAvgClose	-0.21 % minus 0.19 % = -0.40 %	-20.32 %
Future2SesAvgClose	0.03 % minus 0.09 % = -0.06 %	-7.80 %
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MACD 12/26 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 564 instances
Future30SesAvgClose	0.69 % minus 0.97 % = -0.28 %	-2.36 %
Future5SesAvgClose	0.07 % minus 0.19 % = -0.13 %	-6.39 %
Future2SesAvgClose	0.05 % minus 0.09 % = -0.05 %	-6.07 %
Sell Signals - 565 instances
Future30SesAvgClose	0.98 % minus 0.97 % = 0.01 %	0.12 %
Future5SesAvgClose	0.22 % minus 0.19 % = 0.03 %	1.63 %
Future2SesAvgClose	0.23 % minus 0.09 % = 0.13 %	17.01 %
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MACD 12/26 Signal	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 741 instances
Future30SesAvgClose	1.21 % minus 0.97 % = 0.24 %	2.01 %
Future5SesAvgClose	0.22 % minus 0.19 % = 0.02 %	1.18 %
Future2SesAvgClose	0.09 % minus 0.09 % = 0.00 %	-0.48 %
Sell Signals - 740 instances
Future30SesAvgClose	0.99 % minus 0.97 % = 0.02 %	0.18 %
Future5SesAvgClose	0.11 % minus 0.19 % = -0.08 %	-4.31 %
Future2SesAvgClose	-0.02 % minus 0.09 % = -0.11 %	-14.48 %
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Calibrated M by Q Half Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 312 instances
Future30SesAvgClose	1.08 % minus 0.97 % = 0.11 %	0.96 %
Future5SesAvgClose	0.35 % minus 0.19 % = 0.15 %	7.81 %
Future2SesAvgClose	0.36 % minus 0.09 % = 0.27 %	34.27 %
Sell Signals - 311 instances
Future30SesAvgClose	0.81 % minus 0.97 % = -0.16 %	-1.37 %
Future5SesAvgClose	0.11 % minus 0.19 % = -0.08 %	-4.00 %
Future2SesAvgClose	-0.15 % minus 0.09 % = -0.25 %	-31.12 %
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Calibrated M by Q Full Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 225 instances
Future30SesAvgClose	0.58 % minus 0.97 % = -0.39 %	-3.30 %
Future5SesAvgClose	0.28 % minus 0.19 % = 0.09 %	4.42 %
Future2SesAvgClose	0.34 % minus 0.09 % = 0.25 %	31.31 %
Sell Signals - 225 instances
Future30SesAvgClose	0.38 % minus 0.97 % = -0.59 %	-4.96 %
Future5SesAvgClose	-0.19 % minus 0.19 % = -0.38 %	-19.44 %
Future2SesAvgClose	-0.33 % minus 0.09 % = -0.43 %	-54.21 %
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Projected Crossing of SMA 20/200.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 25 instances
Future30SesAvgClose	1.66 % minus 0.97 % = 0.69 %	5.86 %
Future5SesAvgClose	1.08 % minus 0.19 % = 0.89 %	45.11 %
Future2SesAvgClose	0.55 % minus 0.09 % = 0.46 %	57.95 %
Sell Signals - 25 instances
Future30SesAvgClose	-1.07 % minus 0.97 % = -2.04 %	-17.27 %
Future5SesAvgClose	0.05 % minus 0.19 % = -0.14 %	-7.16 %
Future2SesAvgClose	0.74 % minus 0.09 % = 0.65 %	82.55 %
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Projected Crossing of SMA 5/20.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 217 instances
Future30SesAvgClose	0.85 % minus 0.97 % = -0.11 %	-0.97 %
Future5SesAvgClose	0.35 % minus 0.19 % = 0.16 %	8.05 %
Future2SesAvgClose	-0.07 % minus 0.09 % = -0.16 %	-20.78 %
Sell Signals - 175 instances
Future30SesAvgClose	1.36 % minus 0.97 % = 0.39 %	3.34 %
Future5SesAvgClose	0.25 % minus 0.19 % = 0.05 %	2.71 %
Future2SesAvgClose	-0.01 % minus 0.09 % = -0.10 %	-13.09 %
	.

The best buy signal for 30 future sessions was 0.69 % from the Projected Crossing of SMA 20/200.,and the best sell signal for was -2.04 % from the Projected Crossing of SMA 20/200..

For 5 future sessions the best buy signal was 0.89 % from the Projected Crossing of SMA 20/200.,and the best sell signal was -0.75 % from the Moving Avg. 20/200 Divergence.

The best buy signal for 2 future sessions was 0.46 % from the Projected Crossing of SMA 20/200.,and the best sell signal was -0.43 % from the Calibrated M by Q Full Cycle Moving Avg..

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