The Trend Bible

Research Results – Stocks in Rising and Falling Trends in the Medium Long Term

Stocks in rising trends have on average seen a clearly positive price development over the next 66 days and a price development significantly better than average benchmark development.

Research Results – Stocks in Rising and Falling Trends in the Medium Long Term

We have studied how stocks that were in a rising or falling trend at one time have developed over the next three months. Stocks in rising trends were assigned buy signals and stocks in falling trends were assigned sell signals.

c) Denmark.

 

Figure 1: Average price development 66 days after the stocks were in rising trends (blue line) and falling trends (red line) in Investtech’s medium long term technical charts. The width of the shaded area is one standard deviation from the average estimator – the narrower the variance area, the better the estimate. Average benchmark development is the black line. Click the images for bigger versions.

 

Average return after 66 days Norway Sweden Denmark Finland Weighted average
Buy signal, stock in rising tend 5.4 % 5.5 % 5.5 % 2.7 % 5.3 %
Sell signal, stock in falling trend -0.1 % 2.0 % -1.7 % 0.5 % 1.3 %
Benchmark index 3.1 % 4.0 % 3.2 % 2.5 % 3.5 %

Relative return Norge Sverige Danmark Finland Weighted average
Buy signal, stock in rising tend 2.3 ppt 1.5 ppt 2.3 ppt 0.2 ppt 1.9 ppt
Sell signal, stock in falling trend -3.2 ppt -2.0 ppt -4.9 ppt -2.0 ppt -2.2 ppt

ppt: percentage points. The difference between average return from stocks that have triggered signals and average benchmark development.

Stocks in rising trends have a clearly positive price development the next 66 days on average, and price development clearly better than average benchmark development. Similarly stocks in falling trends have developed far weaker than benchmark in the next 66 days.

The calculations are done based on a large data set for a relatively long time period and for four different countries. The uncertainty of the estimate, measured by standard deviation, is fairly low, with high statistical T values. The results are considered robust in spite of the lack of independence between samples (see the Data and Signals section).

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The Trend Bible was written in 2016 by Investtech’s Head of Research Mr. Geir Linløkken. The research team behind the Trend Bible also consists of Senior Researchers Asbjørn Taugbøl and Fredrik Tyvand.

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Investtech has worked on research into behavioural finance and technical and quantitative stock analysis since 1997. The company has developed an analysis system that identifies trends, support and resistance, formations and volume patterns in stock prices, and uses these to generate buy and sell signals. Investtech uses advanced mathematical algorithms and statistical methods in computer programmes and online subscription services.

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Investtech guarantees neither the entirety nor accuracy of the analyses. Any consequent exposure related to the advice / signals which emerge in the analyses is completely and entirely at the investors own expense and risk. Investtech is not responsible for any loss, either directly or indirectly, which arises as a result of the use of Investtechs analyses. Details of any arising conflicts of interest will always appear in the investment recommendations. Further information about Investtechs analyses can be found here disclaimer. The content provided by Investtech.com is NOT SEC or FSA regulated and is therefore not intended for US or UK consumers.


Investtech guarantees neither the entirety nor accuracy of the analyses. Any consequent exposure related to the advice / signals which emerge in the analyses is completely and entirely at the investors own expense and risk. Investtech is not responsible for any loss, either directly or indirectly, which arises as a result of the use of Investtechs analyses. Details of any arising conflicts of interest will always appear in the investment recommendations. Further information about Investtechs analyses can be found here disclaimer. The content provided by Investtech.com is NOT SEC or FSA regulated and is therefore not intended for US or UK consumers.

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