Chande Momentum Oscillator (CMO)
The Chande Momentum Oscillator is a modified RSI. Where the RSI divides the upward movement by the net movement (up / (up + down)), the CMO divides the total movement by the net movement ((up - down) / (up + down)).
There are several ways to interpret the CMO. Values over 50 indicate overbought conditions, while values under -50 indicate oversold conditions. High CMO values indicate strong trends. When the CMO crosses above a moving average of the CMO, it is a buy signal, crossing down is a sell signal.
The Chande Momentum Oscillator was developed by Tushar S. Chande and is described in the 1994 book The New Technical Trader by Tushar S. Chande and Stanley Kroll.
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