Momentum

Momentum is a indicator that measures how far from the equilibrium level a share price is. Momentum is calculated as the difference between share prices for two occasions in time, such as the share price today minus the share price ten days ago.

With momentum, one can get an idea of how overbought or oversold a stock is. Momentum can be used to generate buy signals and sell signals. In order to use momentum to generate buy and sell signals, you have to determine values for the momentum at which these signals should be triggered.