Table 1: Technical indices used as input variables.

Technical

Technical index

Explanation

Moving average (Ma)

5 MA, 6 MA, 10 MA, 20 MA

Moving averages are used to emphasize the direction of a trend and smooth out price and volume fluctuations that can confuse interpretation.

Bias (BIAS)

5 BIAS, 10 BIAS

The difference between the closing value and moving average line, which uses the stock price nature of returning back to average price to analyze the stock market.

Relative strength index (RSI)

6 RSI, 12 RSI

RSI compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset.

Nine days stochastic line (K, D)

9 K, 9 D

The stochastic line K and line D are used to determine the signals of overpurchasing, overselling, or deviation.

Moving average convergence and divergence (MACD)

9 MACD

MACD shows the difference between a fast and slow exponential moving average (EMA) of closing prices. Fast means a short-period average, and slow means a long period one.

Williams %R (pronounced “percent R")

12 W%R

Williams %R is usually plotted using negative values. For the purpose of analysis and discussion, simply ignore the negative symbols. It is best to wait for the security’s price to change direction before placing your trades.

Moving average convergence and divergence (MACD)

9 MACD

MACD shows the difference between a fast and slow exponential moving average (EMA) of closing prices. Fast means a short-period average, and slow means a long period one.

Williams %R (pronounced “percent R")

12 W%R

Williams %R is usually plotted using negative values. For the purpose of analysis and discussion, simply ignore the negative symbols. It is best to wait for the security’s price to change direction before placing your trades.

Transaction volume (TV)

5 TV, 10 TV, 15 TV

Transaction volume is a basic yet very important element of market timing strategy. Volume provides clues as to the intensity of a given price move.