Momentum Interpretation:

This oscillator has an unlimited range. It is therefore not a good indicator to judge overbought or oversold stock. However, crossing the 0 level gives good buy and sell opportunities.

It also gives good divergence signals. A bullish divergence occurs when the stock price makes new lows while the Momentum fails to make new lows. A bearish divergence occurs when the stock price makes new highs while the Momentum fails to make new highs.

Momentum Calculation:

It is obtained by subtracting the x days before close from the today's close. X is the parameter associated with Momentum.

Return from Momentum to Using Indicators

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