Chande Momentum Oscillator
A technical momentum indicator invented by the technical analyst Tushar Chande. It is created by calculating the difference between the sum of all recent gains and the sum of all recent losses and then dividing the result by the sum of all price movement over the period. This oscillator is similar to other momentum indicators such as the Relative Strength Index and the Stochastic Oscillator because it is range bounded (+100 and -100).
Investopedia Commentary
The security is deemed to be overbought when the momentum oscillator is above +50 and oversold when it is below -50. Many technical traders add a nine-period moving average to this oscillator to act as a signal line. Bullish signals are generated when the oscillator crosses above the signal, and bearish signals are generated when the oscillator crosses down through the signal.
Related Links
Getting to Know Oscillators - Part 4: Momentum
Momentum and the Relative Strength Index
Getting Confirmation with the Momentum Strategy
Momentum Trading with Discipline
See also: Crossover, Indicator, Momentum, Oscillator, Overbought, Oversold, Range-Bound Trading, Relative Strength Index - RSI, Stochastic Oscillator, Technical Analysis
Also spelled: Chande Oscillator, Chande Momentum