Stock market glossary

Momentum

Momentum measures how much the price has changed compared with N periods earlier: it's the simplest way to measure the speed of a move.

If momentum is positive the price is higher than N periods ago, if negative lower. The further the value is from zero, the faster the move; when it heads back towards zero the push is running out.

How it's calculated

Momentum = today's close − close N periods ago. The most used period is 10.

Worked example

Today the stock closes at €58, ten sessions ago it closed at €52: the 10-period momentum is 58 − 52 = +€6.

How to read it

Momentum above zero: bullish push; below zero: bearish. If the price makes new highs but momentum doesn't, the trend is losing strength (this is called a divergence).

💡 On Fanta-Trade you'll find this indicator calculated for every stock, over one week, one month, three months and one year, in the "Technical indicators" section of the stock page.

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