Indicator - Momentum
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Definition Momentum
It is obtained by substracting the x days before Close from today's Close. X is the parameter associated with Momentum.
Interpretation Momentum
This oscillator has an unlimited range. It is thus not a good overbought/oversold indicator. However, crossing the 0 level gives good buy/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.
