Momentum indicator (MTM) It is also known as the power index. The securities market is similar to the principle of constant speed in physics: if the rising (falling) trend of stock prices continues, the speed of rising (falling) stock prices will remain roughly the same. The dynamic index (MTM) is based on the principle of constant stock velocity, investigates the rise and fall speed of stock prices, and is an indicator that analyzes stock price trends based on changes in stock price rise and fall speeds. When the stock price reaches a new high in the rising market, MTM fails to cooperate with the rise, and the deviation is a sell signal; when the stock price reaches a new low in the falling market, MTM fails to cooperate with the decline, and a deviation occurs, which is a buy signal. If the stock price's MTM is rising simultaneously at a low level, it indicates that it will rebound in the short term; if its MTM is falling simultaneously at a high level, it indicates that the stock price may fall in the short term.
Determined by the structural characteristics of the power index, when the established trend continues, they can always exceed the changes in stock prices and become moderate. When the current trend eases, it has already started to decline. MTM is often used with the 10-day Momentum Value Moving Average. When MTM is above the horizontal axis, crossing the average line from top to bottom is a sell signal; conversely, when MTM is below the horizontal axis, crossing the average line from bottom to top is a buy signal.
If the stock price reaches a new high during the rise, but MTM does not cooperate with the rise, it means that the rising momentum of the stock price has weakened, and we should beware of the market reversal and decline; on the contrary, if the stock price hits a new low during the decline, but MTM does not cooperate with the decline, , indicating that the downward momentum of the stock price has weakened and it may rebound in the short term. When the K line and MTM rise from a low level simultaneously, it indicates a short-term rebound; on the contrary, the K line and MTM fall simultaneously from a high level, indicating that there will be a retracement in the short term.
Oscillator (OSC), expressed as a percentage of oscillation volume, is another way of expressing the momentum index. Also called rate of change. Momentum Index (MTM), also known as power indicator, its full English name is "Momentum Index". It is a short- and medium-term technical analysis tool that specializes in studying stock price fluctuations. The securities market has a constant speed principle similar to that of physical dynamic indicators: if the rising (falling) trend of stock prices continues, the speed of rising (falling) stock prices will remain roughly the same. The dynamic index (MTM) starts from the principle of constant stock speed, examines the rise and fall speed of stock prices, and analyzes stock price trend indicators.
Dynamic index aims to analyze the speed of stock price fluctuations and study various accelerations, decelerations, inertia and phenomena of stock prices from static to dynamic or from dynamic to static in the process of stock price fluctuations. The theoretical basis of dynamic indexes is the relationship between price and supply and demand. Over time, the rise in stock prices must gradually decrease, the speed and power of changes slowly slow down, and the market can reverse. The opposite is true for declines.
The dynamic index calculates the speed of stock price fluctuations, causing the stock price to enter strong peaks and weak troughs, thus becoming investors' favorite market measurement tool