Technical Analysis

Intraday Momentum Index (IMI)

What is the Intraday Momentum Index (IMI)?

The Intraday Momentum Index (IMI) is a technical indicator that combines aspects of candlestick analysis with the Relative Strength Index (RSI) to generate overbought or oversold signals.

Intraday indicators were developed by market technician Tushar Chande to help investors make trading decisions.

key takeaways

  • The Intraday Momentum Index (IMI) uses relative strength (RSI) in conjunction with candlestick charts to generate trading signals.
  • IMI looks at the relationship between a security’s opening and closing prices over the course of a day, rather than the change in open/close prices over the course of a day.
  • Technical analysts can use IMI to predict when a security is overbought or oversold.

Understanding the Intraday Momentum Index (IMI)

Investors use technical indicators to estimate when they should buy or sell securities such as stocks. Technical analysis using technical indicators examines the relationship between a security’s price and trading volume over different time periods. Indicators such as the RSI and Bollinger Bands seek to generate buy and sell signals without examining a security’s fundamentals. As such, they are generally considered more useful to short-term traders than long-term investors.

IMI looks at the relationship between a security’s opening and closing prices over the course of a day, rather than the change in open/close prices over the course of a day. It combines some of the characteristics of the RSI, the relationship between “close” and “close” and whether a stock is showing signs of being overbought or oversold, combined with candlestick charts. A candlestick chart for a given day contains a “body” that highlights the gap between the open and close, and the price points above the high and low called the upper and lower shadows.

Technical analysts can use IMI to predict when a security is overbought or oversold.

IMI formula

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