We calculate the 90-day Moving Average(90d MA) of the stock price and treat that as the underlying stable trend. We also calculate the 30-day Moving Average(30d MA) and can see that it zig-zags around the 90d trend. Now we can build the following strategy:
1)When the value of 30d MA falls below 90d MA we expect it to revert back to the 90d line. That is, the current price is too low and likely to increase. Hence this is a signal to buy
2) Similarly if the value of 30d MA rises above 90d MA we expect it to fall back to the 90d line. Hence the current price is too high and is a signal to sell
Simple strategies work better than complex ones!