Momentum

Category: Quant Insight

Short-term momentum for stocks has picked up slightly over the past few weeks, but is still weaker than what has been seen over the past few months. Energy commodities have stood out and appear to be entering a bullish phase as both long-term and near-term momentum have turned positive.

Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based on momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

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