Trends and Averages
Stock trends cannot be analyzed like most populations in statistical analysis. When analysis is applied to a well-known and finite population, sample data is then identified and isolated for analysis. In a properly selected set of data, the outcome is expected to reflect behavior of the larger population.
What is the equivalent in stock price trends? Many would think that the overall market is the population, and index-based averages are the sample data. This may be true for marketwide analysis, even with the imperfections of a weighted index. How is this applied to individual stocks? In the case of stock price trends, “population” means every possible price down to the penny, above and below the current level of price. This ...
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