Analysis of Stock Market Investment Strategies

[Pages:62]ProjectNumber:0903

AnalysisofStockMarketInvestmentStrategies

AnInteractiveQualifyingProjectReportSubmittedtothe Facultyof

WORCESTERPOLYTECHNICINSTITUTE inpartialfulfillmentoftherequirementsforthe

DegreeofBachelorofScience by

GrahamPentheny

ComputerScience InteractiveMediaandGameDevelopment

August2009

ApprovedbyProfessorDalinTang,ProjectAdvisor

______________________________________

TableofContents

I.Acknowledgements...................................................................................................4

II.Abstract.....................................................................................................................5

III.ListofFigures..........................................................................................................6

IV.ListofTables............................................................................................................8

1.Introduction...........................................................................................................10

1.1Goals................................................................................................................10

1.2HistoryoftheStockMarket...........................................................................10

1.3ProsandConsofFinancialInvestment........................................................11

2.FinancialInvestmentOpportunities..................................................................13

2.1Stocks..............................................................................................................13

2.2Bonds..............................................................................................................14

2.3CertificatesofDeposit...................................................................................15

2.4MutualFunds.................................................................................................16

3.StockMarketTradingStrategies.........................................................................17

3.1DayTrading.....................................................................................................17

3.2SwingTrading................................................................................................18

4.SimulatedInvestmentsandTheirResults.........................................................19

4.1GoalsandStrategies.......................................................................................19

4.2CompanyProfiles...........................................................................................19

4.2.1AppleInc.........................................................................................19

4.2.2MicrosoftCorp................................................................................20

4.2.3RaytheonCompany.........................................................................22

4.2.4GoogleInc........................................................................................23

4.2.5ElectronicArtsInc..........................................................................24

4.2.6NVIDIACorp...................................................................................25

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4.2.7IntelCorp........................................................................................26

4.2.8AdvancedMicroDevices,Inc.........................................................27

4.2.9Yahoo!Inc........................................................................................28

4.3Simulation1:SwingTrading.........................................................................29

4.3.1Week1.............................................................................................29

4.3.2Week2.............................................................................................35

4.3.3Week3.............................................................................................37

4.3.4Week4.............................................................................................39

4.3.5Summary..........................................................................................41

4.4Simulation2:DayTrading.............................................................................42

4.4.1Week1.............................................................................................42

4.4.2Week2.............................................................................................45

4.4.3Week3..............................................................................................48

4.4.4Week4.............................................................................................50

4.4.5Summary...........................................................................................53

5.Conclusion..............................................................................................................55

References...................................................................................................................57

Appendix:CompleteTransactionRecord...............................................................59

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I.Acknowledgements

IwouldliketothankDr.DalinTang,ProfessorofMathematicalSciencesand

Biomedical Engineering, Worcester Polytechnic Institute, for his advisement over

thisproject.Iwouldalsoliketothankmyfriendsandfamilyfortheirsupport.

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II.Abstract

Thisinvestigationfocusedonwhatmakesaninvestorprofitableinthestock

market. A3-week investment simulation was conducted, utilizing day trading and

swingtradingstrategies.Thefactorsthatattributedtothesuccessofthesimulation

were analyzed, and used to increase investing power and ability. The knowledge

gained through this experiment will be used to make intelligent and informed

investmentdecisionsinthefuture.

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III.ListofFigures

Figure1:AppleInc.(NASDAQ:AAPL)Year-To-DatePriceChart..................................20

Figure2:MicrosoftCorp.(NASDAQ:MSFT)Year-To-DatePriceChart........................21

Figure3:RaytheonCompany(NYSE:RTN)Year-To-DatePriceChart........................22

Figure4:GoogleInc.(NASDAQ:GOOG)Year-To-DatePriceChart...............................24

Figure5:ElectronicArtsInc(NASDAQ:ERTS)Year-To-DatePriceChart...................25

Figure6:NVIDIACorp.(NASDAQ:NVDA)Year-To-DatePriceChart...........................26

Figure7:IntelCorp.(NASDAQ:INTC)Year-To-DatePriceChart.................................27

Figure8:AdvancedMicroDevices,Inc.(NYSE:AMD)Year-To-DatePriceChart.......28

Figure9:Yahoo!Inc.(NASDAQ:YHOO)Year-To-DatePriceChart..............................29

Figure10:AppleInc.(NASDAQ:AAPL)PriceChart(June9th-June19th,2009).......30

Figure11:GoogleInc.(NASDAQ:GOOG)PriceChart(June9th-June19th,2009)....32

Figure12:RatheyonCorp.(NYSE:RTN)PriceChart(June9th-June19th,2009).....33

Figure13:GoogleInc.(NASDAQ:GOOG)PriceChart(June30th-July10th,2009)...38

Figure14:FordMotorCo.(NYSE:F)PriceChart(June17th-June27th2009).........44

Figure15:RockwellMedicalTechnologies(NASDAQ:RMTI)PriceChart

(June23rd?July3rd,2009)................................................................................46

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Figure16:AppleInc.(NASDAQ:AAPL)PriceChart(June30th-July10th,2009)......49 Figure17:NovellInc.(NASDAQ:NOVL)PriceChart(June30th-July10th,2009)....50 Figure18:GoogleInc.(NASDAQ:GOOG)PriceChart(July7th-July17th,2009)......52

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IV.ListofTables

Table1:AAPLTransactions(June17?June26,2009).................................................30

Table2:MSFTTransactions(June17?June26,2009)...............................................31

Table3:GOOGTransactions(June17-June24,2009)................................................32

Table4:INTC,NVDA,ERTS,YHOO,AMDTransactions(June17th?

June26th,2009)...................................................................................................34

Table5:GOOGTransactions(June24-June26,2009).................................................35

Table6:RTN,GOOG,AAPLTransactions(June29th-July3rd,2009)........................36

Table7:AAPL,GOOG,MSFTTransactions(July7th,2009).........................................37

Table8:AAPL,GOOG,MSFTTransactions(July9th,2009).........................................38

Table9:AAPL,NOVLTransactions(July15th,2009)....................................................39

Table10:NOVL,AAPLTransactions(July16th,2009)................................................40

Table11:GOOGTransactions(July17th,2009)............................................................40

Table12:CTV,CSXTransactions(June23rd,2009).....................................................42

Table13:FTransactions(June23rd,2009)..................................................................43

Table14:RHT,TCKTransactions(June25th,2009)....................................................44

Table15:GOOG,YHOO,MSFTTransactions(June26th,2009)...................................45

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