Understand the monthly, quarterly, and semi-annual charts to make your investment strategy more precise

When investing in stocks, looking at fundamentals alone is not enough—you also need a pair of eyes to identify market rhythm. Weekly, monthly, and quarterly technical indicators act like magnifiers of market sentiment, helping you find the best entry and exit points. This article will help you understand these indicators thoroughly, making your investment decisions more confident.

What Are the Monthly, Quarterly, and Half-Year Lines Measuring?

Simply put, these different cycle lines calculate the average purchase cost of investors. You can think of them as:

• Weekly Line: The average closing price over the past 5 trading days
• Monthly Line: The average closing price over the past 20 trading days
• Quarterly Line: The average closing price over the past 60 trading days
• Half-Year Line: The average closing price over the past 120 trading days

Taking NVIDIA (NVDA) as an example, suppose the closing prices over the last 5 days are 903.72, 914.35, 942.89, 950.02, 925.61. The weekly line is calculated by summing these five prices and dividing by 5, resulting in 927.32. As daily prices update, this line will also change, eventually forming a smooth curve on the candlestick chart.

Different investors choose different cycle lines based on their trading periods. Short-term traders focus on 5-day and 10-day lines; medium-term investors look at the monthly and quarterly lines; long-term investors pay attention to the half-year and yearly lines.

How to Use the Monthly, Quarterly Lines? Three Signals Are Enough

1. Price Above the Moving Averages = Safe Zone

Imagine the candlestick chart with prices completely above the weekly, monthly, and quarterly lines, like being protected by a row of fortresses. This indicates that investors who bought the stock in the past week, month, or quarter are all making profits. The stock price is in a relatively safe position, and new investors face lower risk.

Conversely, if the price is suppressed below these averages, it suggests most shareholders are in loss, and the selling pressure may increase, potentially triggering a stampede.

2. Golden Cross and Death Cross — Trend Reversal Points

Golden Cross: When a short-term moving average crosses above a long-term moving average (e.g., 5-day crossing above 20-day). This indicates increasing buying momentum in the short term and is a buy signal.

Death Cross: When a short-term moving average crosses below a long-term moving average. This indicates that short-term sellers dominate and most shareholders are in loss, signaling a sell.

3. Arrangement of Moving Averages

Bullish Arrangement: Short-term, mid-term, and long-term lines are ordered from top to bottom and all sloping upward. This is the strongest buy signal, indicating the stock has bottomed out and an uptrend has formed.

Bearish Arrangement: The order is reversed, with all lines sloping downward. This is a sell signal, indicating the stock is in a continuous decline.

Flat or Conflicting: Multiple lines are clustered together with no clear direction. Caution is advised, as the market needs new catalysts to determine the trend.

Three Common Pitfalls Smart Investors Must Know

When using the monthly, quarterly, and half-year lines, these flaws should not be ignored:

1. Slow Response — Moving averages are based on past prices, so when the trend truly reverses, the indicator lags behind. You might miss the optimal entry or exit point.

2. False Signals from Sudden Events — A stock may experience sharp fluctuations due to major news, creating deceptive signals in the short term that mislead your judgment. Be especially cautious around major data releases.

3. Cannot Be Used Alone — The monthly, quarterly, and half-year lines are auxiliary tools; combining them with volume-price relationships and fundamental analysis is most effective. Blindly following them can be costly.

Practical Tips

• Short-term traders should focus on crossover signals of 5-day and 10-day lines
• Medium-term investors should combine the monthly, quarterly, and half-year lines to assess trend strength
• When seeing bullish arrangements, consider building positions; when seeing bearish arrangements, consider reducing holdings
• During major events or data releases, observe first and avoid making hasty decisions based solely on moving averages
• Use moving averages as a reference, but combine them with volume and fundamental analysis for true investment success

Mastering the rhythm of the monthly, quarterly, and half-year lines will help you better capture market pulses. But remember, there is no perfect indicator—combination thinking is the key to winning.