| The Intraday Momentum Index (IMI) was developed by Tushar Chande, a well-known technical analyst and author of several books on trading strategies, in 1994. Chande developed the IMI to address some of the shortcomings of other momentum indicators, such as the Relative Strength Index (RSI), which can be slow to react to short-term changes in momentum. The IMI indicator is calculated by comparing the total number of price increases to the total number of price decreases over a given period, usually 14 periods. It considers not just the size of price changes but also the frequency of price changes. The resulting value ranges from 0 to 100, with higher values indicating stronger upward momentum and lower values indicating stronger downward momentum. Traders and analysts may use the IMI indicator to identify potential buy or sell signals based on overbought or oversold conditions. For example, if the IMI value is above 70, the market may be overbought, suggesting a potential sell signal. Conversely, the market may be oversold if the IMI value is below 30, meaning a possible buy signal. |
