Stock Analysis Tool (SAT) Lalantha Sathkumara Spring 2009

Overview Project Summery & Background Information Project Goals Technological Background Design & Implementation Demonstration Conclusion & Future work

Project Summery The primary goal of this project is to provide necessary tools for analyzing historical stock market data to find profitable trading patterns/strategies. The primary goal of this project is to provide necessary tools for analyzing historical stock market data to find profitable trading patterns/strategies. In order to accomplish this task, SAT provides following tools: In order to accomplish this task, SAT provides following tools: Graphing tool. Graphing tool. Built-in strategy testing tool. Built-in strategy testing tool. Custom strategy testing tool. Custom strategy testing tool.

Background Information Project SAT is based on technical analysis. Project SAT is based on technical analysis. In technical analysis, historical data been used to find particular patterns occurred in the past. In technical analysis, historical data been used to find particular patterns occurred in the past. SAT database consist of historical data for SAT database consist of historical data for S&P 500 (01/03/1950 to 06/04/2009) – trading days S&P 500 (01/03/1950 to 06/04/2009) – trading days Dow Jones (10/01/1928 to 06/04/2009) – trading days Dow Jones (10/01/1928 to 06/04/2009) – trading days Use of technical indicators are essential for technical analysis. I used two of most popular and widely used indicators (SMA & EMA) in this project. Use of technical indicators are essential for technical analysis. I used two of most popular and widely used indicators (SMA & EMA) in this project.

Project Goals Ability to Graph Ability to Graph Graph pre-defined number of functions. Graph pre-defined number of functions. Custom graph: Able to choose which indicators to graph out of pool of indicators. (Open, High, Low, Close, SMA (x), EMA (x). Custom graph: Able to choose which indicators to graph out of pool of indicators. (Open, High, Low, Close, SMA (x), EMA (x). Ability to test strategies Ability to test strategies Built-in strategies Built-in strategies Custom strategies. Custom strategies.

Technological Background Java SE 6 Java SE 6 Java swing framework (GUI) Java swing framework (GUI) JTable (display results in tabular format) JTable (display results in tabular format) Eclipse IDE Eclipse IDE MySQL database MySQL database Weka framework: used for retrieve data from database and data manipulation. Weka framework: used for retrieve data from database and data manipulation. QN Plot framework : used for graphing. QN Plot framework : used for graphing.

Design & Implementation Database SAT GUI Output Results Tabular Format Weka plug-in Graphs Strategy plug-in QN Plot (Graph Plug-in) Testing environment plug-in

Design & Implementation General Information page General Information page Initial page. Consist of information regarding the chosen stock. Initial page. Consist of information regarding the chosen stock.

Design & Implementation Graph plug-in: available graphs Close & SMA (x) Close, SMA (x), SMA (x) Daily price difference Custom: up to 5 functions from following Open, High, Low, Close, SMA (x), EMA (x) {x = days; example: SMA 10 = 10-day SMA }

Design & Implementation Strategy plug-in Strategy plug-in Short term Strategy 10/50 SMA crossover 10/50 EMA crossover 10/50 crossover holding x-days pattern (0 < x < 50) Long term Strategy 50/200 SMA crossover 50/200 EMA crossover 50/200 crossover holding x –days pattern (0 < x < 200)

Design & Implementation Short term crossover strategy Short term crossover strategy By default SAT will compare 5, 10, 20 day holding pattern. By default SAT will compare 5, 10, 20 day holding pattern. Allowed to input one user defined holding day. Then profit for that day will be compared with above values. Allowed to input one user defined holding day. Then profit for that day will be compared with above values. Long term crossover strategy Long term crossover strategy By default SAT will compare 50, 100, 200 day holding patterns. By default SAT will compare 50, 100, 200 day holding patterns. Allowed to input one user defined holding day. Then profit for that day will be compared with above values. Allowed to input one user defined holding day. Then profit for that day will be compared with above values.

Design & Implementation Testing custom strategies Testing custom strategies Need to provide buy & sell condition Need to provide buy & sell condition Condition requirements: Condition requirements: Operands: Close, SMA X, EMA X) {X= day} Operands: Close, SMA X, EMA X) {X= day} Operators: > or or < Example: Example:

Demonstration

Conclusion & Future Work Conclusion Conclusion The primary goals of this project was met successfully. The primary goals of this project was met successfully. Future work Future work Add ability to retrieve stock data automatically. Add ability to retrieve stock data automatically. Improve testing environment so it can accept wider range of functions. Improve testing environment so it can accept wider range of functions. Add ability to predict future stock prices. Add ability to predict future stock prices.