Most profitable traders buy stocks that are showing persistence intermediate strength verses the S&P as this has been shown to work. Hence the default period is 63 days or 3 months.
The idea is that you need to be buying what the institutions are buying. The best trader I know of for this style of trading is Joe Fahmy (@jfahmy), he is a NY based fund manager who uses the O'Neill method. The idea is that this indicator works similar to MarketSmith's relative strength line. But I much prefer Tradingview because I can write little programs like this and this service is more reasonably priced.
Also you can change the bench mark, to say a sector ETF such XLK when looking a tech stocks, or to a commodity index if you are interested in trading commodity ETFs.
Basically show positive momentum over the medium term. Specifically 3 months to 18 months. if you are looking to buy a stock then you would like to know that the stock is stronger than the market, otherwise just buy the market. The moving average is to confirm whether there is persistent relative strength present in the stock relative to the market as a whole. Also if you are interested in 2 stocks then you can then this can be used to determine which is the stronger.