1. What is Stock Momentum Score?

The Momentum Score measures the rate of change in a stock's price over a specific period. It helps investors identify stocks that are gaining or losing strength by comparing the current price to the price from N periods ago.

2. How Does the Calculator Work?

The calculator uses the momentum formula:

Where:

• Current Price — The most recent closing price of the stock
• Price N Periods Ago — The closing price from N periods earlier (days, weeks, or months)

Explanation: A momentum score above 100 indicates positive momentum (price increase), while a score below 100 indicates negative momentum (price decrease).

3. Importance of Momentum Calculation

Details: Momentum scoring is crucial for trend following strategies, identifying stocks with strong upward or downward trends, and making informed investment decisions based on price movement patterns.

4. Using the Calculator

Tips: Enter the current price and the price from N periods ago in the same currency. Both values must be positive numbers. The result shows the momentum percentage score.

5. Frequently Asked Questions (FAQ)

Q1: What does a momentum score of 120 mean?
A: A score of 120 means the current price is 20% higher than the price N periods ago, indicating positive momentum.

Q2: What time period should I use for N periods?
A: Common periods include 10, 20, 50, or 200 days, depending on your trading strategy and time horizon.

Q3: Is higher momentum always better?
A: Not necessarily. While high momentum can indicate strong performance, it may also signal overbought conditions that could lead to price corrections.

Q4: Can momentum be used for all types of stocks?
A: Momentum works best for liquid stocks with consistent trading volume. It may be less reliable for illiquid or highly volatile stocks.

Q5: How often should I calculate momentum?
A: Regular monitoring (daily or weekly) is recommended to track changes in momentum and identify trend reversals early.