Momentum is another fundamental oscillator designed to measure the rate of price change, not the actual price level. Momentum is calculated from the net difference between the current closing price and the oldest closing price from a predetermined period.
Momentum is a trend following where it is used to detect abnormal increase or decrease in the rate of acceleration of the price movement, thus giving bullish and bearish divergence signals.
Construction of the Momentum:
Momentum Bullish Divergence
Momentum Bearish Divergence
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