“One quick question about your comments on mean revision in the Autonomies. It seems to have been quite some time since the pharms (BMY,LLY,MRK) have traded near their 200 day averages. Am I reading these charts incorrectly?”

Eoin Treacy's view Thank you for this question which others may have an interest in. I think much will depend on how you define “near”. Rather than thinking of the moving average as a sacrosanct level we define it as the trend mean. Using our method of analysing charts through trend consistency I have described BMY, LLY, MRK as all having found support in the region of their 200-day MAs over the last three weeks. None of these shares are currently overextended relative to the 200-day MA. Where they recently found support is consistent with a ranging consolidation which allows the MA to catch up and unwind a previously overbought condition. A crossing over of the price and MA is not a necessary condition for reversion to take place.