Moving average forecasting models are important tools that help managers make educated decisions. Moving averages are mainly used to forecast short historical range data. This tool along with other forecasting tools are now computerized, making it easy to use. In regards to moving average forecasting tools, do the following:
- Look at daily price data over the past five years for three different stocks. Use the keywords "stock price data", "return data", "company data", and "stock returns" to find information on the Internet.
- On Excel, create graphs based on trend-moving averages with the following values form: 10, 100, and 200.
- On Excel, graph the centered-moving averages with the following values form: 10, 100, and 200.
- How do the moving averages for the same values of m compare between a trend-moving average and a centered-moving average?
- How can these moving averages assist a stock analyst in determining the stocks' price direction?