Moving Average Analysis of MSFT

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From the Weekend Report 12/26/2008: There has not been much change in the phase of the 200 day moving average since this time last week.

Recent Averages with Candlestick Chart. of MicroSoft

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Different ways of averaging are tested on MSFT stock prices for their ability to predict trend movements. 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 MSFT 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 Fosback pointed out that a legitimate signal should be one that is clearly evident through a variety of averaging methods.

Companies In the News

Friday, January 02, 2009: We have news on Intel, ticker symbol INTC. Signs of an over-bought condition have become noticable. Also, there are breaking events concerning Praxair, Inc. and Allegheny Energy, Inc..

From the News Archive: (12/31/2008 ) Favorable events happened at Fluor Corporation (NEW) and National City Corporation. Meanwhile, bad news came from Office Depot, Inc. and Automatic Data Processing.

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 - 23 instances
Future30SesAvgClose	2.35 % minus 1.88 % = 0.47 %	3.98 %
Future5SesAvgClose	0.32 % minus 0.37 % = -0.05 %	-2.50 %
Future2SesAvgClose	0.48 % minus 0.19 % = 0.28 %	36.10 %
Sell Signals - 22 instances
Future30SesAvgClose	2.89 % minus 1.88 % = 1.01 %	8.59 %
Future5SesAvgClose	1.35 % minus 0.37 % = 0.98 %	49.75 %
Future2SesAvgClose	0.93 % minus 0.19 % = 0.74 %	94.02 %
	.
Moving Avg. 5/20 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 151 instances
Future30SesAvgClose	1.56 % minus 1.88 % = -0.32 %	-2.67 %
Future5SesAvgClose	0.28 % minus 0.37 % = -0.09 %	-4.81 %
Future2SesAvgClose	0.18 % minus 0.19 % = -0.01 %	-1.29 %
Sell Signals - 150 instances
Future30SesAvgClose	2.01 % minus 1.88 % = 0.13 %	1.08 %
Future5SesAvgClose	0.09 % minus 0.37 % = -0.28 %	-14.23 %
Future2SesAvgClose	0.15 % minus 0.19 % = -0.04 %	-5.01 %
	.
Moving Avg. 5/200 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 38 instances
Future30SesAvgClose	2.30 % minus 1.88 % = 0.42 %	3.52 %
Future5SesAvgClose	1.04 % minus 0.37 % = 0.67 %	33.80 %
Future2SesAvgClose	0.54 % minus 0.19 % = 0.35 %	44.26 %
Sell Signals - 37 instances
Future30SesAvgClose	2.06 % minus 1.88 % = 0.18 %	1.49 %
Future5SesAvgClose	0.11 % minus 0.37 % = -0.26 %	-13.22 %
Future2SesAvgClose	0.04 % minus 0.19 % = -0.15 %	-19.20 %
	.
MACD 12/26 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 529 instances
Future30SesAvgClose	1.78 % minus 1.88 % = -0.10 %	-0.87 %
Future5SesAvgClose	0.36 % minus 0.37 % = -0.01 %	-0.44 %
Future2SesAvgClose	0.24 % minus 0.19 % = 0.05 %	6.79 %
Sell Signals - 531 instances
Future30SesAvgClose	2.02 % minus 1.88 % = 0.14 %	1.17 %
Future5SesAvgClose	0.51 % minus 0.37 % = 0.14 %	6.92 %
Future2SesAvgClose	0.32 % minus 0.19 % = 0.13 %	16.33 %
	.
MACD 12/26 Signal	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 741 instances
Future30SesAvgClose	2.22 % minus 1.88 % = 0.34 %	2.84 %
Future5SesAvgClose	0.55 % minus 0.37 % = 0.18 %	9.21 %
Future2SesAvgClose	0.33 % minus 0.19 % = 0.14 %	17.39 %
Sell Signals - 740 instances
Future30SesAvgClose	1.84 % minus 1.88 % = -0.04 %	-0.30 %
Future5SesAvgClose	0.25 % minus 0.37 % = -0.12 %	-6.29 %
Future2SesAvgClose	0.05 % minus 0.19 % = -0.14 %	-17.36 %
	.
Calibrated M by Q Half Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 305 instances
Future30SesAvgClose	1.49 % minus 1.88 % = -0.39 %	-3.32 %
Future5SesAvgClose	0.11 % minus 0.37 % = -0.26 %	-13.31 %
Future2SesAvgClose	-0.03 % minus 0.19 % = -0.22 %	-27.49 %
Sell Signals - 305 instances
Future30SesAvgClose	1.49 % minus 1.88 % = -0.39 %	-3.29 %
Future5SesAvgClose	0.19 % minus 0.37 % = -0.18 %	-9.20 %
Future2SesAvgClose	0.07 % minus 0.19 % = -0.12 %	-15.78 %
	.
Calibrated M by Q Full Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 179 instances
Future30SesAvgClose	1.24 % minus 1.88 % = -0.64 %	-5.45 %
Future5SesAvgClose	0.22 % minus 0.37 % = -0.15 %	-7.39 %
Future2SesAvgClose	0.20 % minus 0.19 % = 0.01 %	1.40 %
Sell Signals - 180 instances
Future30SesAvgClose	0.97 % minus 1.88 % = -0.91 %	-7.73 %
Future5SesAvgClose	-0.20 % minus 0.37 % = -0.57 %	-28.91 %
Future2SesAvgClose	-0.32 % minus 0.19 % = -0.51 %	-64.92 %
	.
Projected Crossing of SMA 20/200.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 35 instances
Future30SesAvgClose	3.28 % minus 1.88 % = 1.40 %	11.85 %
Future5SesAvgClose	1.38 % minus 0.37 % = 1.01 %	51.31 %
Future2SesAvgClose	0.81 % minus 0.19 % = 0.62 %	78.66 %
Sell Signals - 23 instances
Future30SesAvgClose	2.09 % minus 1.88 % = 0.21 %	1.75 %
Future5SesAvgClose	0.32 % minus 0.37 % = -0.05 %	-2.42 %
Future2SesAvgClose	0.16 % minus 0.19 % = -0.03 %	-3.73 %
	.
Projected Crossing of SMA 5/20.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 205 instances
Future30SesAvgClose	1.66 % minus 1.88 % = -0.22 %	-1.89 %
Future5SesAvgClose	0.67 % minus 0.37 % = 0.30 %	15.41 %
Future2SesAvgClose	0.36 % minus 0.19 % = 0.17 %	22.10 %
Sell Signals - 161 instances
Future30SesAvgClose	1.33 % minus 1.88 % = -0.55 %	-4.68 %
Future5SesAvgClose	-0.09 % minus 0.37 % = -0.46 %	-23.37 %
Future2SesAvgClose	-0.08 % minus 0.19 % = -0.27 %	-34.49 %
	.

The best buy signal for 30 future sessions was 1.40 % from the Projected Crossing of SMA 20/200.,and the best sell signal for was -0.91 % from the Calibrated M by Q Full Cycle Moving Avg..

For 5 future sessions the best buy signal was 1.01 % from the Projected Crossing of SMA 20/200.,and the best sell signal was -0.57 % from the Calibrated M by Q Full Cycle Moving Avg..

The best buy signal for 2 future sessions was 0.62 % from the Projected Crossing of SMA 20/200.,and the best sell signal was -0.51 % from the Calibrated M by Q Full Cycle Moving Avg..

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Moving Average Convergence for MicroSoft Stock Prices - MSFT