FEZ’s moving averages
On November 3, 2015, 93% of the portfolio holdings of the SPDR Euro Stoxx 50 ETF (FEZ) closed above the 50-day moving averages, and 83% closed above the 20-day moving averages. This indicates a short-term uptrend, as 20-day moving average and 50-day moving average will be the strong first and second support points, respectively, for these individual stocks.
The above graph shows what percentage of FEZ’s portfolio holdings is above 100-day, 50-day, and 20-day moving averages.
Moving averages of top performers
Total (TOT) was trading at 46.53 euros, above its 100-day, 50-day, and 20-day moving averages of 43.26 euros, 42.29 euros, and 44.91 euros, respectively. It indicates an uptrend.
Repsol was trading at 12.58 euros, above its 50-day and 20-day moving averages of 11.54 euros and 11.78 euros but below its 100-day moving average of 13.55 euros. It indicates a short-term uptrend.
Banco Santander (SAN) was trading at 5.23 euros, above its 50-day and 20-day moving averages of 5.10 euros and 5.16 euros but below its 100-day moving average of 5.70 euros. It indicates a short-term uptrend.
What does moving average indicate?
Moving average is the average stock price over a certain period of time. It’s a trend-following indicator. It’s also known as the lagging indicator because it’s calculated based on past prices.
If the stock price crosses the longer-term moving average, or the 100-day moving average, then it indicates an uptrend where the moving average is a strong support point. When the stock price crosses short-term moving averages, either 50-day or 20-day moving averages, it indicates a short-term uptrend. In that short-term uptrend, it will maintain the 50-day and 20-day moving averages as a first and second support point.
A support point is the point where the buyers will not allow the price to go down or the point where more buyers are ready to buy compared to the sellers.
FEZ is invested in large capitalization stocks such as Sanofi (SNY), Total SA (TOT), Banco Santander (SAN), Siemens (SIEGY), and Anheuser-Busch Inbev (BUD), which represent 5.0%, 4.8%, 3.4%, 3.1%, and 3.6%, respectively, of FEZ’s portfolio.
Next, we’ll look at FEZ according to its volatility and mean return.