Sunday, February 24, 2013

Stocks Above 50MA 7% Less Than One Day Ago

On 2/20/2013 we had a fairly decent down day. The number of stocks above their 50MA dropped over 7% from the previous day. I ran the following study to determine what happens if we buy at the close of the down day or in this case, 2/20/2013.
As you can see, 5 days is the honey spot. It's tough to buy on such bad days, but this shows that most of the these big down days are just shakeouts. It pays to go against the market when we experience these down days.

Buying at the close on the 20th and selling at the close on the 27th would be the latest trade for this study. I'll put out an update on the 27th to see how it did this time around.

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