Case Study: $(........../7$ marks$)$

Technicians use moving$-$average lines to detect changes in trends by observing the

interaction between the price of an asset and its moving average over a specific

period. Consider a stock whose price data over the past $10$ days are as follows:

Day

$5-$Day

Simple

Moving

Average

$($$$)$

Trend

$2$

$3$

$4$

$5$

$6$

$7$

$8$

$9$

$10$

Stock

Price $($$$)$

$54\mathrm{.}50$

$54\mathrm{.}25$

$55\mathrm{.}75$

$56\mathrm{.}50$

$57\mathrm{.}25$

$56\mathrm{.}00$

$54\mathrm{.}75$

$53\mathrm{.}25$

$52\mathrm{.}50$

$53\mathrm{.}00$

Assume a simple moving average $($SMA$)$ is calculated over a $5-$day period.

Calculate the SMA for each day, and based on the SMA, identify any potential

changes in the trend during the $10-$day period.Case Study: $/7$ marks$)$

Technicians use moving$-$average lines to detect changes in trends by observing the interaction between the price of an asset and its moving average over a specific period. Consider a stock whose price data over the past $10$ days are as follows:

$\backslash$table$[[$Day$,\backslash$table$[[$Stock$],[$Price $($$$)]],\backslash$table$[[5-$Day$],[$Simple$],[$Moving$],[$Average$],[($$$)]],$Trend$],[1,54\mathrm{.}50,,],[2,54\mathrm{.}25,,],[3,55\mathrm{.}75,,],[4,56\mathrm{.}50,,],[5,57\mathrm{.}25,,],[6,56\mathrm{.}00,,],[7,54\mathrm{.}75,,],[8,53\mathrm{.}25,,],[9,52\mathrm{.}50,,],[10,53\mathrm{.}00,,]]$

Assume a simple moving average $($SMA$)$ is calculated over a $5-$day period. Calculate the SMA for each day, and based on the SMA, identify any potential changes in the trend during the $10-$day period.