We all have our favorite momentum indicators. One of mine is percent off 1 year high. This requires 252 data points and comparisons, plus a division. Another one is the 200-day moving average. This requires 200 closing prices, 199 additions and a division. A simple momentum indicator is Rate of Change which is the return of the asset of the last N days. This requires two prices and a division to calculate. That is simple. In this post I will show one that requires just one price and no math.
In my last post, Monthly Rotation – Closeness to $10, while investigating the results I discovered that the higher priced stocks seemed to get better results. That got me thinking. Could simply ranking by the highest priced stocks work? It makes some sense. Price going up is what we want. Also, stocks don’t seem to split as often now days as they used. It seems to be a badge of honor to have a high-priced stock. Look at Amazon, Apple, Netflix and many more.
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Good Quant Trading,
Cesar
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