Monday, October 9, 2017

How do you create a moving average using MS Excel?

You could use the Data Analysis menu item on your Excel application to find moving averages. Moving averages are technical indicators of data trend.

In order to use data analysis (regression, sampling, moving average,etc.) with
MS Excel you should have the Data Analysis menu item on your Excel ribbon.
You can do it longhand (which happens to be easier) as well.

If you do not find the Data Analysis menu item in your MS Excel ribbon you should bring in the Analysis ToolPak add-in as described here.
http://hodentekhelp.blogspot.com/2017/09/how-do-you-get-data-analysis-menu-item.html

Using Data Analysis Menu item:

Here is the data for which I want to find the moving average. This the Microsoft closing stock prices for the period shown. Only a part of the data is shown.


You click Data Analysis menu item on the ribbon to display the tasks that you can carry out.


Click on Moving Averages as the bottom of the menu. The following is displayed.





You insert the Input Range (the range that contains data for which you need the moving average. Output Range is where you want the moving average. You can also enable Chart Output as well as Standard Errors. The Interval is the moving average (200day, 100 day etc)

For the data in the sheet shown previously these are as follows:



Click OK to display the chart with data and the 7 day (there are only data for 30 days) moving average as shown.


The X-axis is the period and Y_Axis are the data and the moving average. Here are the 7day and 15 days moving averages.




Moving averages are used sometimes in buy/sell decisions of stocks. 200 Day moving average is often used. I think MSFT is a good buy.

A technical indicator compiled as a statistical series of a security's closing prices throughout 200 consecutive trading days. A 200-day moving average is designed to discover changes in a trend. Generally, a moving average is superimposed on a stock's line chart. If the stock price penetrates the moving average on the upside after a downward trend, the penetration is a signal to buy. But if the stock price penetrates the moving average on the downside following an upward trend, the penetration is a bearish sign.



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