Weekly high/low moving average
by Peter Aan
Most moving averages of price are based on the closing price (see "Simple moving average
crossover," Stocks & Commodities, June 1989), but the weekly variation computes moving averages of
the weekly highs and lows, based on the most recently completed calendar week.
This is a very simple system; you only have to compute the average high and low once a week (Figure 1)
and if, for instance, your current position is short, you will be concerned only with the high average.
Both the high and low averages are plotted on a weekly bar chart (Figure 2). When weekly prices cross or
"break" through either of the moving average levels, it is a signal to buy or sell (Figure 3). The rules of
the system are straightforward: