Predicting SARS-CoV-2 Infection Trend Using Technical Analysis Indicators.

Abstract

Coronavirus disease 2019 (COVID-19) pandemic is a global health emergency caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). This study aimed to evaluate whether technical analysis (TA) indicators, commonly used in the financial market to spot security price trend reversals, might be proficiently used also to anticipate a possible increase of SARS-Cov-2 spread. Analysis was performed on datasets from Italy, Iran, and Brazil. TA indicators tested were: (1) the combined use of a faster (3-d) and a slower (20-d) simple moving averages (SMA), (2) the moving average converge/divergence (MACD), and (3) the divergence in the direction of the number of new daily cases trend and the corresponding MACD histogram. We found that the use of both fast/slow SMAs and MACD provided a reliable signal of trend inversion of SARS-Cov-2 spread. Results were consistent for all the 3 countries considered. The trend reversals signaled by the indicators were always followed by a sustained trend persistence until a new signal of reversal appeared. TA indicators tested here proved to be reliable tools to identify in the short mid-term a subsequent change of direction of viral spread trend either downward, upward, or sideward.