Momentum Oscillator

A momentum oscillator is a technical analysis tool that measures the speed and strength of a price movement by comparing later prices to earlier ones. It is calculated as a percentage of the latest price compared to the price a number of periods ago. It is usually displayed as a line on a chart with a vertical axis representing magnitude and a horizontal axis representing time. The slope of the oscillator is proportional to the speed and strength of the movement. It is used to signal overbought or oversold conditions as well as points at which investors may wish to buy or sell.