Moving Average Analysis of MCD

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From the Weekend Report 3/12/2010: Since the previous week the phase of the oscillator around the 200 bar average is almost unchanged.

MCD: Recent Averages with Candlestick Chart.

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This page looks at the predictive abilities of different methods of averaging applied to MCD 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 MCD.

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. A good un-ambiguous signal will be noticable through a variety of averaging methods, including some of the most simple.

Companies In the News

Thursday, March 18, 2010: We have news on MicroSoft, ticker symbol MSFT. Signs of an over-bought condition have become noticable. Also, there are breaking events concerning Mylan Inc. and Goldman Sachs Group, Inc..

From the News Archive: (3/17/2010 ) Favorable events happened at LoJack Corp and Martha Stewart. Meanwhile, bad news came from Patterson Companies, Inc. and LSI Corporation.

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 - 28 instances
Future30SesAvgClose	1.94 % minus 1.10 % = 0.84 %	7.15 %
Future5SesAvgClose	0.62 % minus 0.21 % = 0.41 %	20.80 %
Future2SesAvgClose	-0.06 % minus 0.11 % = -0.17 %	-21.69 %
Sell Signals - 28 instances
Future30SesAvgClose	1.28 % minus 1.10 % = 0.19 %	1.58 %
Future5SesAvgClose	0.34 % minus 0.21 % = 0.13 %	6.44 %
Future2SesAvgClose	0.24 % minus 0.11 % = 0.13 %	16.32 %
	.
Moving Avg. 5/20 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 219 instances
Future30SesAvgClose	1.54 % minus 1.10 % = 0.44 %	3.75 %
Future5SesAvgClose	0.35 % minus 0.21 % = 0.14 %	6.98 %
Future2SesAvgClose	0.08 % minus 0.11 % = -0.03 %	-3.78 %
Sell Signals - 218 instances
Future30SesAvgClose	1.20 % minus 1.10 % = 0.10 %	0.85 %
Future5SesAvgClose	0.35 % minus 0.21 % = 0.14 %	7.02 %
Future2SesAvgClose	0.15 % minus 0.11 % = 0.04 %	5.09 %
	.
Moving Avg. 5/200 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 50 instances
Future30SesAvgClose	0.97 % minus 1.10 % = -0.13 %	-1.10 %
Future5SesAvgClose	-0.02 % minus 0.21 % = -0.23 %	-11.75 %
Future2SesAvgClose	0.18 % minus 0.11 % = 0.07 %	8.63 %
Sell Signals - 50 instances
Future30SesAvgClose	0.62 % minus 1.10 % = -0.48 %	-4.06 %
Future5SesAvgClose	0.26 % minus 0.21 % = 0.04 %	2.08 %
Future2SesAvgClose	0.06 % minus 0.11 % = -0.05 %	-5.82 %
	.
MACD 12/26 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 741 instances
Future30SesAvgClose	1.14 % minus 1.10 % = 0.05 %	0.38 %
Future5SesAvgClose	0.22 % minus 0.21 % = 0.01 %	0.39 %
Future2SesAvgClose	0.12 % minus 0.11 % = 0.01 %	1.54 %
Sell Signals - 740 instances
Future30SesAvgClose	1.10 % minus 1.10 % = 0.01 %	0.06 %
Future5SesAvgClose	0.22 % minus 0.21 % = 0.01 %	0.47 %
Future2SesAvgClose	0.14 % minus 0.11 % = 0.03 %	4.25 %
	.
MACD 12/26 Signal	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 989 instances
Future30SesAvgClose	1.10 % minus 1.10 % = 0.01 %	0.06 %
Future5SesAvgClose	0.25 % minus 0.21 % = 0.03 %	1.73 %
Future2SesAvgClose	0.13 % minus 0.11 % = 0.03 %	3.18 %
Sell Signals - 989 instances
Future30SesAvgClose	1.11 % minus 1.10 % = 0.02 %	0.14 %
Future5SesAvgClose	0.18 % minus 0.21 % = -0.03 %	-1.74 %
Future2SesAvgClose	0.08 % minus 0.11 % = -0.03 %	-3.56 %
	.
Calibrated M by Q Half Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 437 instances
Future30SesAvgClose	0.99 % minus 1.10 % = -0.10 %	-0.86 %
Future5SesAvgClose	0.17 % minus 0.21 % = -0.04 %	-2.05 %
Future2SesAvgClose	0.21 % minus 0.11 % = 0.10 %	12.47 %
Sell Signals - 436 instances
Future30SesAvgClose	1.28 % minus 1.10 % = 0.18 %	1.56 %
Future5SesAvgClose	0.25 % minus 0.21 % = 0.04 %	1.78 %
Future2SesAvgClose	0.11 % minus 0.11 % = 0.01 %	0.64 %
	.
Calibrated M by Q Full Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 284 instances
Future30SesAvgClose	1.68 % minus 1.10 % = 0.58 %	4.92 %
Future5SesAvgClose	0.27 % minus 0.21 % = 0.06 %	2.92 %
Future2SesAvgClose	0.29 % minus 0.11 % = 0.18 %	22.85 %
Sell Signals - 284 instances
Future30SesAvgClose	1.73 % minus 1.10 % = 0.64 %	5.40 %
Future5SesAvgClose	0.34 % minus 0.21 % = 0.12 %	6.25 %
Future2SesAvgClose	0.08 % minus 0.11 % = -0.03 %	-3.52 %
	.
Projected Crossing of SMA 20/200.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 36 instances
Future30SesAvgClose	1.84 % minus 1.10 % = 0.74 %	6.30 %
Future5SesAvgClose	0.40 % minus 0.21 % = 0.18 %	9.32 %
Future2SesAvgClose	0.42 % minus 0.11 % = 0.31 %	39.85 %
Sell Signals - 36 instances
Future30SesAvgClose	0.52 % minus 1.10 % = -0.58 %	-4.91 %
Future5SesAvgClose	-0.21 % minus 0.21 % = -0.43 %	-21.66 %
Future2SesAvgClose	-0.04 % minus 0.11 % = -0.15 %	-18.61 %
	.
Projected Crossing of SMA 5/20.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 272 instances
Future30SesAvgClose	1.04 % minus 1.10 % = -0.05 %	-0.45 %
Future5SesAvgClose	0.30 % minus 0.21 % = 0.09 %	4.47 %
Future2SesAvgClose	0.15 % minus 0.11 % = 0.04 %	4.85 %
Sell Signals - 207 instances
Future30SesAvgClose	0.72 % minus 1.10 % = -0.38 %	-3.20 %
Future5SesAvgClose	0.25 % minus 0.21 % = 0.04 %	1.84 %
Future2SesAvgClose	0.14 % minus 0.11 % = 0.03 %	3.46 %
	.

The best buy signal for 30 future sessions was 0.84 % from the Moving Avg. 20/200 Divergence,and the best sell signal for was -0.58 % from the Projected Crossing of SMA 20/200..

For 5 future sessions the best buy signal was 0.41 % from the Moving Avg. 20/200 Divergence,and the best sell signal was -0.43 % from the Projected Crossing of SMA 20/200..

The best buy signal for 2 future sessions was 0.31 % from the Projected Crossing of SMA 20/200.,and the best sell signal was -0.15 % from the Projected Crossing of SMA 20/200..

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Moving Average Analysis for MCD Stock Prices