A semiconductor seasonal-index before the relative-strength overlay

One semiconductor name, not a basket

The case used one semiconductor equity rather than a basket or index so a seasonal pattern could be isolated in a single name.

Seasonal analysis is applied to regularly repeating movements that last a year or less and arise from climate, economic activity, or customs.

Leave the seasonal-component in the residual

Each price is treated as the joint product of trend, cycle, seasonal, and irregular influences, so a four-quarter moving average is used to cancel trend and cycle and leave the seasonal-plus-irregular residual.

That ratio-to-moving-average step divides each observation by a centered multi-period average. Trend and longer cycles drop out, and the seasonal-component remains with the irregular residual.

Rescale like-period ratios into a seasonal-index

Twelve years of quarterly closes were used to build the quarterly seasonal-index, and the same span was used for a monthly index shown without the intermediate arithmetic.

After ratios are grouped by quarter, a modified-mean that drops the high and low values is rescaled so the four means sum to 400 and average 100.

The seasonal-index can be read as a year-round regime map with a neutral baseline of 100, not only as peak and trough dates.

A seasonal-trading-window at month resolution

The monthly seasonal-index built by the same procedure placed a seasonal high in May and a seasonal low in November.

Seasonal highs and lows were treated as month-span guides only, with chart markers placed arbitrarily inside those months so they are not read as exact-day signals. The implied seasonal-trading-window is a month-resolution interval for entry, exit, or stand-aside.

The seasonal table is framed as a year-round signpost for whether price is tracking or departing from seasonal tendency, not only as a pair of high and low dates.

Relative strength only as a timing overlay

A 21-day relative-strength-index, with readings below 30 treated as oversold and above 70 as overbought, was overlaid on daily charts from early 1989 through June 1992 as a timing adjunct to the seasonal map.

In this historical workflow the relative-strength-index is a bounded oscillator computed on a fixed lookback of ordered prices and used only as a timing overlay on the seasonal map.

When a growth trend overwhelms the calendar

Names with strong growth characteristics were set aside as weaker candidates because a dominant trend component can overwhelm cyclical and seasonal factors.