Question

Give 4 examples of each with a definition
1- financial anomalies

2- momentum

3- reversal

solve it as soon as

Thank's

Answer 1

Financial anomaly is a situation where the actual results differ than the expected results as projected by the model. Calender effects are the prime examples of financial anomalies.

examples are January effect where the idea is that stocks underperform in the fourth quarter of the year as in India

september effect which is conserned with market performing poorly in September.

Days of the week where it is thought that the trend on monday will be followed as that of previous friday.

Aspirin indicator, where the market and aspirin production are inveresly related with market rising, less demand for aspirin for headaches.

Momentum It is the rate of change of the price of the stock or the volume of the stock. A trader may take a position in the stock with considering that the momentum willcontinue upwards or downward.

Examples are

Upward momentum with the price or volumes moving up constantly.

Downward momemtum with the price or the volumes moving down costantly.

Sideways momentum where the price may consolidate withou much deviation in the price of the stock.

Reversal is the change in the movement of direction of prices. A stock may start to reverse and move downwards when the prices were rising and the price may start to move down when the prices were rising.

For example, when an asset's price was moving up the prices took a reversal and started to move down or when an assets price were moving down it took a reversal and moved up. It may indicate a change in trend of prices.