A chartist believes that Stock Z exhibits price reversals, i.e. if the return was high over the past week it tends to be low over the next five trading days, and vice versa. Over the past week, the price of Stock Z has fallen. Which of the following strategies is the most attractive to the chartist who wants to exploit this pattern?
a) Buy Stock Z today and sell in a week’s time.
b) Sell Stock Z today and buy back in a week’s time.
c) Buy Stock Z in a week’s time and sell a week after that.
d) Sell Stock Z in a week’s time and buy back a week after that.