A stock’s 1-Month Price is determined by taking its closing price on the final trading day of a given month. The stock’s price at this time will be the recorded data point for that month and will become that month’s 1-Month Price. Our team uses the 1-Month Price in tandem with the 10-Month SMA as a Buy/Sell trend indicator. The 10-Month SMA serves as the “trigger” line and the 1-Month Price functions to signal whether the current trend is either a ‘Buy’ or a ‘Sell’. If a stock’s 1-Month Price is trading above the 10-Month SMA, this signals a ‘Buy’. If a stock’s 1-Month Price is trading below the 10-Month SMA, this signals a ‘Sell’. Once either a ‘Buy’ or ‘Sell’ signal is generated, as long as the 1-Month Price remains on that side of the 10-Month SMA the trend signal is still intact.

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For example, if a stock’s 1-Month Price finishes a month trading above the 10-Month SMA, this generates a new ‘Buy’ signal. Every consecutive month after this that the stock’s 1-Month price continues to remain above the 10-Month SMA signals a continuation of the ‘Buy’ signal and bullish trend. Because of this the stock can be purchased.

Thanks,

Chuck Hughes