The momentum indicator is a technical analysis tool used to measure the rate at which a stock's price changes. It calculates the difference between the current and previous prices and displays the result as a single line on a chart. The momentum indicator helps to identify potential trend reversals or confirm existing trends. High momentum readings indicate that a trend is likely to continue, while low momentum readings can signal a potential reversal.
Momentum - Technical Analysis from A to Z
The momentum indicator measures the amount of a security's price that has changed over a given period. The interpretation of the Momentum indicator is identical to the interpretation of the price ROC. Both indicators display the rate-of-change of a security's price. However, the Price ROC indicator shows the rate of change as a percentage, whereas the Momentum indicator displays the rate of change as a ratio.
Momentum - Technical Analysis from A to Z