L7 - Stock Strategies Flashcards
1
Q
What are the five broad classes of trading signals?
A
- Momentum
- Value/Reversal
- Investment
- Profitability
- Intangibles
2
Q
How do you calculate Cumulative Abnormal Returns around Earnings Announcement Dates - Momentum?
A
3
Q
How do you trade the Prior 11-months strategy - Momentum?
A
4
Q
How do you trade the 52-week high strategy - momentum?
A
5
Q
What is the behavioural reason behind the 52-week high strategy?
A
- In GEORGE and HWANG (2004), they offer a behavioral explanation.
- –Traders use the 52‐week high as a reference point against which they evaluate the potential impact of news.
- –When good news has pushed a stock’s price near or to a new 52‐week high, traders are reluctant to bid the price of the stock higher even if the information warrants it. The information eventually prevails and the price moves up, resulting in a continuation.
- –Similarly, when bad news pushes a stock’s price far from its 52‐week high, traders are initially unwilling to sell the stock at prices that are as low as the information implies. The information eventually prevails and the price falls
6
Q
A
