Chande Momentum Oscillator

AAA

DEFINITION of '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 EXPLAINS 'Chande Momentum Oscillator'

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 TERMS
  1. Indicator

    Statistics used to measure current conditions as well as to forecast ...
  2. Overbought

    1. A situation in which the demand for a certain asset unjustifiably ...
  3. Momentum

    The rate of acceleration of a security's price or volume. The ...
  4. Crossover

    The point on a stock chart when a security and an indicator intersect. ...
  5. Oscillator

    A technical analysis tool that is banded between two extreme ...
  6. Range-Bound Trading

    A trading strategy that identifies stocks trading in channels. ...
Related Articles
  1. Trading Strategies

    How do I build a trading strategy with the Chande Momentum Oscillator?

    Learn about the concepts behind Tushar Chande's momentum oscillator, including some simple steps you can use to help build a trading strategy.
  2. Trading Strategies

    Momentum Trading With Discipline

    This type of strategy demands controlled decision-making, requiring a continual refinement of entry and exit techniques.
  3. Trading Strategies

    Use The Momentum Strategy To Your Advantage

    Learn how to use a number of different indicators to know when to make your trading moves.
  4. Trading Strategies

    Momentum And The Relative Strength Index

    These two indicators can give the trader a better understanding of when to get in and out of an issue.
  5. Trading Strategies

    Momentum Indicates Stock Price Strength

    Momentum can be used with other tools to be an effective buy/sell indicator.
  6. Trading Strategies

    What technical tools can I use to measure momentum?

    One of the main goals of every trader using technical analysis is to measure the strength of an asset's momentum and the likelihood that it will continue. This is the primary purpose of indicators ...
  7. Trading Strategies

    Risk Management Techniques For Shorting Call Options

    Shorting covered calls is a popular options trade strategy. Here are the methods to mitigate the risk/loss and enhance profits for selling covered calls
  8. Chart Advisor

    Use This ETF To Trade The Swiss Franc

    Traders were stunned last week when the Swiss National Bank removed the currency peg that tied the value of the Swiss franc to the euro.
  9. Trading Strategies

    Day's First Trade Can Serve As Support/Resistance

    The first trade of the day in liquid markets defines a narrow price level that can act as support or resistance for the entire session.
  10. Chart Advisor

    3 Energy Related Stocks Poised For A Pop

    A sharp decline in energy prices have created an interested opportunity in several oil-and-gas related companies. Given the strong downtrends apparent on the charts, most traders would use recent ...

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center