investments
posted by lia82 .
Assume the following daily closing for the Dow Jones Industrial Average:
Day DJIA Day DJIA
1 12,010 7 12,220
2 12,100 8 12,130
3 12,165 9 12,250
4 12,080 10 12,315
5 12,070 11 12,240
6 12,150 12 12,310
a. calculate a fourday moving average for Days 4 through 12.
b. Assume that the index on day 13 closes at 12,300. would this signal a buy or sell decision?
Please show me the calculation steps.Thanks
This site has a good explanation of the steps needed to calculate the moving average.
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:moving_averages
Since 12,300 is above the moving average, you could sell to lock in a profit.
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