Moving Average Indicators for ITW

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From the Weekend Report 11/5/2010: The current price is 7.00 % above the 200 bar SMA and it has increased the distance since last week. This represents phase 1 of the MACD cycle.

Recent Averages with Candlestick Chart. of Illinois Tool Works Inc.

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This page looks at the predictive abilities of different methods of averaging applied to ITW stock prices. 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 ITW 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. 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.

Moving Average Convergence of Illinois Tool Works Inc.

	Companies In the News
	Monday, November 15, 2010: We have news on PG&E Corporation, ticker symbol PCG. A significant moving average event has happened. Also, there are breaking events concerning Cree, Inc. and Abbott Laboratories. From the News Archive: (11/12/2010 ) A favorable event happened at PetSmart, Inc. Meanwhile, bad news came from Intel, Chesapeake Energy Corporation, and JP Morgan Chase.

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 - 19 instances
Future30SesAvgClose	1.58 % minus 0.98 % = 0.60 %	5.07 %
Future5SesAvgClose	0.03 % minus 0.20 % = -0.16 %	-8.29 %
Future2SesAvgClose	0.32 % minus 0.10 % = 0.22 %	27.49 %
Sell Signals - 19 instances
Future30SesAvgClose	1.55 % minus 0.98 % = 0.57 %	4.81 %
Future5SesAvgClose	0.08 % minus 0.20 % = -0.12 %	-6.09 %
Future2SesAvgClose	0.24 % minus 0.10 % = 0.14 %	17.54 %
	.
Moving Avg. 5/20 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 164 instances
Future30SesAvgClose	1.16 % minus 0.98 % = 0.18 %	1.54 %
Future5SesAvgClose	0.14 % minus 0.20 % = -0.06 %	-2.88 %
Future2SesAvgClose	0.08 % minus 0.10 % = -0.02 %	-2.39 %
Sell Signals - 164 instances
Future30SesAvgClose	0.58 % minus 0.98 % = -0.40 %	-3.41 %
Future5SesAvgClose	-0.12 % minus 0.20 % = -0.31 %	-15.98 %
Future2SesAvgClose	-0.07 % minus 0.10 % = -0.17 %	-21.38 %
	.
Moving Avg. 5/200 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 41 instances
Future30SesAvgClose	1.53 % minus 0.98 % = 0.55 %	4.65 %
Future5SesAvgClose	0.05 % minus 0.20 % = -0.15 %	-7.37 %
Future2SesAvgClose	0.14 % minus 0.10 % = 0.04 %	5.57 %
Sell Signals - 41 instances
Future30SesAvgClose	0.85 % minus 0.98 % = -0.13 %	-1.07 %
Future5SesAvgClose	-0.10 % minus 0.20 % = -0.29 %	-14.93 %
Future2SesAvgClose	-0.17 % minus 0.10 % = -0.27 %	-34.08 %
	.
MACD 12/26 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 567 instances
Future30SesAvgClose	1.21 % minus 0.98 % = 0.23 %	1.99 %
Future5SesAvgClose	0.11 % minus 0.20 % = -0.09 %	-4.64 %
Future2SesAvgClose	-0.01 % minus 0.10 % = -0.11 %	-13.77 %
Sell Signals - 568 instances
Future30SesAvgClose	1.24 % minus 0.98 % = 0.26 %	2.18 %
Future5SesAvgClose	0.18 % minus 0.20 % = -0.02 %	-1.00 %
Future2SesAvgClose	0.11 % minus 0.10 % = 0.01 %	1.58 %
	.
MACD 12/26 Signal	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 752 instances
Future30SesAvgClose	0.84 % minus 0.98 % = -0.14 %	-1.22 %
Future5SesAvgClose	0.20 % minus 0.20 % = 0.00 %	-0.01 %
Future2SesAvgClose	0.10 % minus 0.10 % = 0.00 %	0.18 %
Sell Signals - 752 instances
Future30SesAvgClose	0.90 % minus 0.98 % = -0.08 %	-0.70 %
Future5SesAvgClose	0.16 % minus 0.20 % = -0.03 %	-1.76 %
Future2SesAvgClose	0.05 % minus 0.10 % = -0.05 %	-6.57 %
	.
Calibrated M by Q Half Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 318 instances
Future30SesAvgClose	0.82 % minus 0.98 % = -0.16 %	-1.35 %
Future5SesAvgClose	0.11 % minus 0.20 % = -0.09 %	-4.39 %
Future2SesAvgClose	0.09 % minus 0.10 % = -0.01 %	-0.89 %
Sell Signals - 318 instances
Future30SesAvgClose	1.04 % minus 0.98 % = 0.06 %	0.47 %
Future5SesAvgClose	0.13 % minus 0.20 % = -0.06 %	-3.19 %
Future2SesAvgClose	0.07 % minus 0.10 % = -0.03 %	-3.33 %
	.
Calibrated M by Q Full Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 228 instances
Future30SesAvgClose	0.93 % minus 0.98 % = -0.05 %	-0.41 %
Future5SesAvgClose	0.27 % minus 0.20 % = 0.07 %	3.50 %
Future2SesAvgClose	0.12 % minus 0.10 % = 0.02 %	2.72 %
Sell Signals - 228 instances
Future30SesAvgClose	1.17 % minus 0.98 % = 0.19 %	1.58 %
Future5SesAvgClose	0.29 % minus 0.20 % = 0.09 %	4.67 %
Future2SesAvgClose	0.16 % minus 0.10 % = 0.06 %	7.88 %
	.
Projected Crossing of SMA 20/200.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 34 instances
Future30SesAvgClose	1.80 % minus 0.98 % = 0.82 %	6.97 %
Future5SesAvgClose	0.22 % minus 0.20 % = 0.02 %	1.10 %
Future2SesAvgClose	0.10 % minus 0.10 % = 0.00 %	0.25 %
Sell Signals - 30 instances
Future30SesAvgClose	0.49 % minus 0.98 % = -0.49 %	-4.17 %
Future5SesAvgClose	0.27 % minus 0.20 % = 0.07 %	3.79 %
Future2SesAvgClose	0.04 % minus 0.10 % = -0.06 %	-7.98 %
	.
Projected Crossing of SMA 5/20.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 204 instances
Future30SesAvgClose	1.13 % minus 0.98 % = 0.15 %	1.26 %
Future5SesAvgClose	0.21 % minus 0.20 % = 0.02 %	0.88 %
Future2SesAvgClose	0.14 % minus 0.10 % = 0.04 %	4.94 %
Sell Signals - 157 instances
Future30SesAvgClose	1.33 % minus 0.98 % = 0.35 %	2.97 %
Future5SesAvgClose	0.29 % minus 0.20 % = 0.09 %	4.50 %
Future2SesAvgClose	0.33 % minus 0.10 % = 0.23 %	29.76 %
	.

The best buy signal for 30 future sessions was 0.82 % from the Projected Crossing of SMA 20/200.,and the best sell signal for was -0.49 % from the Projected Crossing of SMA 20/200..

For 5 future sessions the best buy signal was 0.07 % from the Calibrated M by Q Full Cycle Moving Avg.,and the best sell signal was -0.31 % from the Moving Avg. 5/20 Divergence.

The best buy signal for 2 future sessions was 0.22 % from the Moving Avg. 20/200 Divergence,and the best sell signal was -0.27 % from the Moving Avg. 5/200 Divergence.

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