Classical technical analysis methods of stock evolution are recalled,
i.e. the notion of moving averages and momentum indicators. The moving averages lead to define death and gold crosses, resistance
and support lines. Momentum indicators lead the price trend, thus give signals before the price trend turns over. The classical
technical analysis investment strategy is thereby sketched. Next, we present a generalization of these tricks drawing on physical
principles,
i.e. taking into account not only the price of a stock but also the volume of transactions. The latter becomes a time dependent
generalized mass. The notion of pressure, acceleration and force are deduced. A generalized (kinetic) energy is easily defined.
It is understood that the momentum indicators take into account the sign of the fluctuations, while the energy is geared toward
the absolute value of the fluctuations. They have different patterns which are checked by searching for the crossing points
of their respective moving averages. The case of IBM evolution over 1990-2000 is used for illustrations.
PACS. 05.45.Gg Control of chaos, applications of chaos – 74.40.+k Fluctuations (noise, chaos, nonequilibrium superconductivity,
localization, etc.) – 95.10.Fk Chaotic dynamics (see also 05.45.-a Nonlinear dynamics and nonlinear dynamical systems) – 05.45.Tp
Time series analysis
Received 31 December 2001