Momentum Oscillator (MOM)

Overview

The Momentum Oscillator stands as one of the most fundamental indicators in technical analysis, measuring the velocity of price movement with elegant simplicity. By dividing current price by price n periods ago and multiplying by 100, MOM creates an oscillator centered around 100 that reveals whether prices are accelerating or decelerating. Unlike bounded oscillators like RSI that are constrained between 0 and 100, the Momentum Oscillator has no upper or lower limits, allowing it to capture the full extent of explosive moves or sharp declines. This unbounded nature makes it particularly valuable for identifying extreme market conditions and potential exhaustion points.

What makes the Momentum Oscillator especially powerful is its leading nature - it often turns before price itself, providing early warning of potential trend changes. When momentum begins to slow (the oscillator starts declining while price continues higher), it suggests the current move is losing steam. This characteristic makes MOM invaluable for divergence analysis, where disagreements between price action and momentum often precede significant reversals. The indicator's sensitivity can be adjusted through the period parameter - shorter periods like 10 capture quick momentum shifts ideal for day trading, while longer periods smooth out noise for swing trading applications.

Interpretation & Trading Signals

Example Usage

Code examples will be available once the Rust implementation is complete.