Chapter IV: The Traditional Seasonal Analysis of Price Trends can still yield valuable predictive information. |
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| Viewing the Calendar Trends, we see that Identix does not fit the most common pattern. The more usual seasonal pattern has the low prices during the pre-winter months. Averaged over the last 14 years, IDNX exhibits a strong spread between the high and low months of 16.1 percent. For this chart, price plots for each year are traced on top of each other. Each month's value is adjusted to the mean price for the particular year. The orange line represents the average monthy price expressed as a portion of the annual price. |
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| IDNX speculators might well avoid the month of June. Here, the profitability of the month is defined as the percentage change between the mean price on the first day of the month and the mean price on the last day of the month. So the figures displayed here refer to the average change during each month, rather than changes between months. By this measure, the month of September appears favorable, offering a quick return averaging 11.95 percent. |
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| The 'Monthly Profitability' discussed above applies to holdings during the course of a single month. Another, perhaps more realistic evaluation is the one charted here. Here the value evaluated is the highest price reached at anytime during the next quarter. Investors shrewd enough to invest in Identix during December have seen an average maximum gain of 39.9 percent at some time in the following 60 trading days. |
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This plot of the average monthly price as a proportion of the average yearly price removes the year-to-year secular trend. However the within-year trend is still intact, so it is expected that the December value might be higher than the January average, for a healthy company. Over the span of 7 months from August to March a gain of 16.1 percent has occurred historically. This is an annual rate of 27.6 percent. Investing 'against the tide' of the seasonal trend can cost an annualized 38.64 percent. Before making any decisions based on the standard 12 Month Seasonal Calendar, be sure to check the characteristics of the 24 Month Political Election Calendar. Research shows that many characteristics of the traditional seasonal averages are actually induced by events in the 24 month political cycle, so the characteristics of even versus odd numbered years may be quite distinct. |
Much Deeper Market Timing Analysis with IDNX roadmap and Summary of most effective indicators: |
| Friday, March 19, 2010: We have news on AT and T, ticker symbol T. A significant moving average event has happened. Also, there are breaking events concerning Goldman Sachs Group, Inc. and MicroSoft. From the News Archive: (3/18/2010 ) Favorable events happened at Martha Stewart and Zimmer Holdings, Inc.. Meanwhile, bad news came from Mylan Inc. and Patterson Companies, Inc.. |