Technically Speaking Archives

Chart Analysis

Technical Indicators & Overlays

Computerized Investing > Second Quarter 2013

Rate of Change Indicator

PRINT | | | | COMMENTS (5) | A A   Reset

by CI Staff

The term “momentum” is used frequently in investing. In fundamental analysis, it can refer to strong and/or growing sales, earnings, etc. In technical analysis, it is used to describe the speed or force of price movement. Common momentum indicators measure the change in price from one period to another or the percentage change in price from one period to another. In this installment of Technically Speaking, we focus on the momentum indicator called rate of change (ROC).

The rate of change (ROC) indicator is a pure momentum oscillator that measures the percent change in price over the last n periods. In other words, the indicator compares the latest price (typically the closing price) with the (closing) price n periods ago. The resulting oscillator fluctuates above and below the zero line, indicating shifts from positive to negative. Similar to other oscillators, ROC signals include centerline crossovers and overbought/oversold conditions.

...To continue reading this article you must be a Computerized Investing Subscriber.

Gain exclusive access to this article and all of the benefits and investment education a Computerized Investing subscription offers.

SUBSCRIBE TODAY for just $24.
Log in
Already a CI subscriber? Login to read the rest of this article.

Subscribe
A subscription to Computerized Investing includes a monthly email and access to the CI Website, all of which aim to benefit your investing skills with respect to computers and the Internet.