Trading Techniques  |  APR 2001

Analyzing Trends In Momentum by Martin J. Pring

Quo Vadis? Analyzing Trends In Momentum Momentum pure and simple is fine, but how about the trend of momentum? Here’s what it can tell you. by Martin J. Pring Momentum is a generic term that applies to all oscillators, and the principles of momentum interpretation can in general be applied to all oscillators in one way or another. These interpretations are susceptible to overbought/oversold conditions, divergences, and so forth. However, there is an even more useful interpretive technique that can be applied to momentum, and that is to analyze the actual trend of the oscillator. First, it is important to understand that momentum, just like price, moves in trends. This means that the trend-determining techniques used in price trend analysis work just as well with momentum trends. Even so, we must bear in mind that a reversal in the trend in momentum is usually, but not always, associated with a similar reversal in the price itself. Here are some trend-reversal techniques that can help you get a better fix on using momentum interpretation for greater profits.

by Martin J. Pring