Momentum Indicator

Momentum in its raw form is simply a difference between two prices, which makes it the ancestor of rate of change, MACD and every oscillator in this category. The academic momentum effect — that securities which have performed well over six to twelve months have tended to continue for a further few months — is a documented anomaly in return data, and it is a statistical tendency across large portfolios rather than a property of any single security. Applying a portfolio-level finding to one stock is a category error that this dictionary does not endorse. Because momentum is unbounded and in rupees, it cannot be compared between securities without normalising.