1. Log on to finance.yahoo.com to find the monthly dividend-adjusted closing prices for the most recent four years for Abercrombie \& Fitch (ANF). Also collect the closing level of the S\&P 50o Index over the same period. a. Calculate the four-month moving average of both the stock and the S\&P 500 over time. For each series, use Excel to plot the moving average against the actual level of the stock price or index. Examine the instances where the moving average and price series cross. Is the stock more or less likely to increase when the price crosses through the moving average? Does it matter whether the price crosses the moving average from above or below? How reliable would an investment rule based on moving averages be? Perform your analysis for both the stock price and the S\&P 5 Oo. b. Calculate and plot the relative strength of the stock compared to the S\&P 500 over the sample period. Find all instances in which relative strength of the stock increases by more than 10 percentage points (e.g., an increase in the relative strength index from 0.93 to 1.03) and all those instances in which relative strength of the stock decreases by more than 10 percentage points. Is the stock more or less likely to outperform the S\&P in the following two months when relative strength has increased or to underperform when relative strength has decreased? In other words, does relative strength continue? How reliable would an investment rule based on relative strength be? 2. Yahoo! Finance provides considerable data that can be used for technical analysis. Short interest ratios are found in the Statistics table for each stock. You can also prepare charts of moving averages for any company by clicking the price chart for the company and then clicking on Indicators. You can select the moving average option and specify the length of the moving average. Prepare charts of moving averages and obtain short interest ratios for GE and Amazon (AMZN). Prepare a one-year chart of the 25- and 50-day average price of GE, AMZN, and the S\&P 500 Index. a. Which, if either, of the companies is priced above its 25- and 50-day averages? b. Would you consider their charts as bullish or bearish? Why? c. What are the short interest ratios for the two companies? 1. Log on to finance.yahoo.com to find the monthly dividend-adjusted closing prices for the most recent four years for Abercrombie \& Fitch (ANF). Also collect the closing level of the S\&P 50o Index over the same period. a. Calculate the four-month moving average of both the stock and the S\&P 500 over time. For each series, use Excel to plot the moving average against the actual level of the stock price or index. Examine the instances where the moving average and price series cross. Is the stock more or less likely to increase when the price crosses through the moving average? Does it matter whether the price crosses the moving average from above or below? How reliable would an investment rule based on moving averages be? Perform your analysis for both the stock price and the S\&P 5 Oo. b. Calculate and plot the relative strength of the stock compared to the S\&P 500 over the sample period. Find all instances in which relative strength of the stock increases by more than 10 percentage points (e.g., an increase in the relative strength index from 0.93 to 1.03) and all those instances in which relative strength of the stock decreases by more than 10 percentage points. Is the stock more or less likely to outperform the S\&P in the following two months when relative strength has increased or to underperform when relative strength has decreased? In other words, does relative strength continue? How reliable would an investment rule based on relative strength be? 2. Yahoo! Finance provides considerable data that can be used for technical analysis. Short interest ratios are found in the Statistics table for each stock. You can also prepare charts of moving averages for any company by clicking the price chart for the company and then clicking on Indicators. You can select the moving average option and specify the length of the moving average. Prepare charts of moving averages and obtain short interest ratios for GE and Amazon (AMZN). Prepare a one-year chart of the 25- and 50-day average price of GE, AMZN, and the S\&P 500 Index. a. Which, if either, of the companies is priced above its 25- and 50-day averages? b. Would you consider their charts as bullish or bearish? Why? c. What are the short interest ratios for the two companies
