Figure 7.2 shows how Abbott Laboratories is currently trending upward. Using the simple moving average strategy discussed in Chapter 3.1, the low was predicted to be around February 4th. From this point on the trend is expected to continue moving upward until the closing price falls below the SMA. A simple moving average was chosen over an exponential moving average because this is on a longer, 3-month scale. Using this method, it was decided to buy 450 shares of ABT at $55.52 apiece for a total investment of $24,984.
Figure