JOURNAL OF APPLIED BUSINESS AND ECONOMICS
Portfolio Management of High Growth Firms and Technical Buy Points
Author(s): Matt Lutey, David Rayome
Citation: Matt Lutey, David Rayome, (2020) "Portfolio Management of High Growth Firms and Technical Buy Points," Journal of Applied Business and Economics, Vol. 22, Iss.4, pp. 26-35
Article Type: Research paper
Publisher: North American Business Press
Abstract:
This paper shows that current earnings and prices at or near new highs can be combined with the Average Directional Index (DM) technical indicator to generate excess return in the market. Excess returns are statistically significant via difference in means tests (robust to recession only periods, and additional timeframes) and CAPM, Fama and French 3 and 5 factor models. The model is robust to alternate weight specification and has consistent results across multiple start dates. The system is replicable and has a win rate of 63% turning $100,000 into $33,000,000. It is constructed without lookahead bias.