Description

• Founded by Tushar Chande, CMO is an oscillator which shows power of bull and bear on the stock price
• It also ranges in -100 to +100 counts similar to many momentum oscillators
• Since it uses both up days and down days in numerator and denominator, it can directly measure momentum

Interpretation

• It is an oscillator, reading above +100 is where stock is considered overbought and below -100 as oversold
• CMO crossing its trigger line in the upward direction gives you positive trigger and in downward direction gives you negative trigger
• The price line moving below TEMA indicates an downtrend suitable for Sell trades
• It can be plotted with other indicators for crossovers giving effective signals

Default Parameters Used/Inputs

• Close Line
• Period
• Avg Type
• Avg Period

Returns/Output

Rate of Change in stocks price over a specific period

Formula

CMO = {(Su – Sd) / (Su + Sd)}*100
where,
S = sum of u & d for period taken into calculation
u = (Today close – Previous Close). For days when, T Close > P Close
d = (Today close – Previous Close). For days when, T Close < P Close