Timing Solutions for Swing Traders: A Novel Approach to Successful Trading Using Technical Analysis and Financial Astrology

PRICE MOMENTUM

Price momentum measures the speed of the rise or fall of price relative to the selected period, the results of which are plotted as an oscillator. Most momentum oscillators are plotted with an average line. When the momentum oscillator crosses above or below its average line, it generates a crossover signal, which is similar to crossover in two different periods of moving average lines. The resulting momentum plot will fluctuate between its high and low points. Generally, when the momentum is above 40/50, it is considered to be in an overbought condition. And when the momentum is below negative (40/50), it is considered to be in an oversold condition. Overbought and oversold conditions signal that the market is overstretched. The center line is the zero line, and when momentum is above the zero line, it indicates strength. When it is below the zero line, it indicates weakness. In a bearish market, when the momentum moves from above to below the zero line and then reverses in an upward direction above the zero line, it does not mean the downtrend is over. It just means that the downtrend is slowing down. Crossover at an overbought level (overbought reversal) indicates bearishness and crossover at an oversold level (oversold reversal) indicates bullishness. A reversal indicates an increase or decrease of the price momentum and it may or may not coincide with a price reversal. When readings are at extreme highs, price momentum is considered to be overbought, and when ...