Technical Analysis on Coronavirus and Stock

technical analysis coronavirus

I just found this article published in the famous Lancet Journal which projected Wuhan could actually have over 75000 cases as of 25 Jan 2020 and the number would double each week. It has been about 1 week since then till now, so current projected number based on this model published in Lancet journal is over 150000, aligned with my projection in yesterday article for Hubei = 7153 x 16.7, about 120000 with simple statistical method.
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Besides investment, my profession is in modeling and simulation, therefore having interest to perform additional analysis with simplified methods which could be applied in investment and also many aspects in life, including coronavirus projection.

Despite the official # infected could be much less than actual, the data reported is still useful for trend analysis (similar to Technical Analysis in stock investment) as long as it is consistently reported each day. One could monitor the daily new # infected (was 2000, now increasing to 2500 daily, sign of spreading continues) and # death (stable around 40-50 daily). Currently, there is still no sign of slowing down, the growth in number is under mild acceleration mode (# new cases daily is increasing from 2000 to 2500, likely higher in next few days).

Using investing jargon, the virus is a “growth” virus. We need to monitor the growth rate and external factors (eg collaboration among different countries to minimize the spreading) to determine the possible reversal. Time is a factor. Similar to investment, one may buy an investing stock in crisis but does not have the holding power, may fail eventually, buy low sell lower. For patient infected, as long as immune system is strong (as if strong fundamental business), able to last through the winter time (period for natural recovery even if infected), one could recover naturally without medicine, having new immunity to resist future new virus (similar to stock, each breakout of resistance could become the next support for future crisis with falling in prices).

When new # infected and / or # death on current day is lower than yesterday, it is the first sign of deceleration (slower spreading) but # new cases will still continue until reaching 0 one day (no new case), only then it reaches a peak. Since there is typically 14 days of incubation period for virus, there will be time delay of 14 days from last patient to actual ending of this wave of spreading (until another outbreak again, could be a few years later, if someone never learns from mistake, mess up with wild animal again). For SARS, it takes about 8 months for it to disappear. For common flu, it becomes part of our life, taking turn to visit us each season. For coronavirus, it may end up as SARS (1 time or rare virus) or common flu (if spreading could not be controlled, human has to make peace with this new virus, when most people are affected, there will be natural immune system build up, fatality rate may drop to as low as common flu of 0.05%).

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