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WMS Industries - Crossing the 200-day Average 
Friday, June 11, 2010
By Gibbons Burke
Caught in the recent market downdraft, WMS Industries (WMS3) dropped below the 200-day average on Tuesday and as of Wednesday's close had a 'large' 6.7% decline over the previous five trading days. But on Thursday the stock gained a 'big' 3.9% trend-day gain, lifting it back above the 200-day and 100-day averages to close at $44.23.
Q: How has WMS performed in the past when it has crossed above the 200-day average in the second quarter of the year?
A: According to the 23 previous occurrences of this event, EventEdge indicates that WMS has shown a strong bullish edge that peaks 61 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Thursday, 10 June 2010) is Friday, 3 September 2010. WMS rallies in 87% of the cases (20 of 23) by an average of 26.1% relative to the close on the event date. The average of the 3 declines is -6.4%. The overall return of the 23 cases is 21.8%, which, based on the close of WMS on the event date ($44.23), provides a target price of $53.87.
Click here4 to investigate this trading idea further in EventEdge®, our interactive event analysis research tool.
Gibbons Burke5 is editor of MarketHistory.com.
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Let variable values:
@ = GII.WMS.NYSE
theEvent = IF
@ crosses above 200 value average of @
AND
Date is second quarter
THEN 1
ENDIF
Date Day t+1 t+21 t+33 t+49 t+61
06/11/1992 Thu 0.8 8.1 21.0 25.0 23.4
06/30/1992 Tue 3.8 20.0 23.1 19.2 16.9
04/12/1993 Mon 6.0 23.2 41.7 36.3 30.4
05/03/1995 Wed -2.7 -0.7 5.3 12.0 18.7
05/24/1995 Wed -1.3 -2.6 11.8 17.0 19.6
06/16/1995 Fri 3.8 3.8 13.3 18.4 13.9
06/30/1995 Fri 3.8 14.0 13.4 16.6 7.0
05/17/1996 Fri 6.2 14.9 11.8 5.6 8.7
05/05/1997 Mon -0.6 0.6 19.0 24.5 20.2
05/19/1997 Mon 0.6 4.9 22.2 20.4 20.4
06/10/1997 Tue 2.4 22.6 17.2 16.0 26.2
06/30/1998 Tue 1.5 -6.0 -3.0 62.7 73.1
05/15/2000 Mon -2.1 18.1 31.4 29.8 35.1
05/30/2000 Tue 1.0 24.7 26.3 27.8 44.8
04/18/2001 Wed 4.3 26.3 66.2 67.0 33.4
05/02/2003 Fri 0.6 3.5 21.9 17.9 26.1
05/28/2003 Wed 2.5 8.6 17.7 42.3 65.2
06/24/2004 Thu 2.3 -2.8 -15.8 -24.4 -9.3
05/04/2005 Wed 2.0 7.3 11.2 14.4 9.7
06/07/2006 Wed 1.5 -5.4 0.6 0.5 -0.4
06/29/2006 Thu 0.7 -2.5 -0.3 2.0 7.9
06/13/2008 Fri 4.4 -20.2 -20.3 -8.8 -9.5
04/03/2009 Fri 6.3 31.3 20.5 14.2 20.8
06/10/2010 Thu NaN NaN NaN NaN NaN
Avg 2.1 8.3 15.5 19.8 21.8
AvgPos 2.9 14.5 20.8 23.3 26.1
AvgNeg -1.7 -5.7 -9.8 -16.6 -6.4
PctPos 82.6 69.6 82.6 91.3 87.0
PctNeg 17.4 30.4 17.4 8.7 13.0
Maximum 6.3 31.3 66.2 67.0 73.1
Minimum -2.7 -20.2 -20.3 -24.4 -9.5
StdDev 2.5 12.8 17.9 20.1 19.9
ZStat 0.8 0.7 0.9 1.0 1.1
Variance 6.3 164.3 321.6 403.8 397.5
24 Occurrences |
Comments:
Web Address of this trading idea:
Links:
2 http://www.markethistory.com/content/analog/analog.html?ticker=WMS
3 http://quote.morningstar.com/stock/s.aspx?t=wms
4 http://www.markethistory.com/content/events/stocks/chart.html?ticker=WMS&events=CrossAboveSMA2000,quarter&date=2010-06-10
5 http://www.markethistory.com/staff/detail.html?s=gibbons