Thursday, June 21, 2007

 
Technical Indicators

Intraday Momentum Index

Developed by Tushar Chande, the Intraday Momentum Index is a combination of the Relative Strength Index and Candlestick Analysis.

The IMI is calculated like the RSI but uses the relationship between the intraday opening and closing prices to determine whether the day is up or down. When the close is above the open, it is an up day. If the close is below the open it is a down day. White candlesticks signify an up day, black candlesticks used for down days.

As with the RSI, overbought conditions (and lower prices ahead) are indicated when the index rises above 70. Values below 30 indicate a potential oversold situation and higher price ahead. Remember, as with all overbought/oversold indicators, you should first quantify the trendiness of the market before acting on any signals...

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