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Intraday Momentum Index - IMI

The Intraday Momentum Index (IMI) combines intraday candlestick patterns and the Relative Strength Index (RSI) to provide suitable overbought and oversold levels for intraday option traders. The IMI can help traders identify potential opportunities to initiate bullish or bearish trades in response to intraday price corrections or bumps in trends. IMI is calculated by dividing the sum of up days by the total of up and down days over a period, usually 14 days, with readings over 70 indicating overbought conditions and under 30 showing oversold levels.

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230 views1 page

Intraday Momentum Index - IMI

The Intraday Momentum Index (IMI) combines intraday candlestick patterns and the Relative Strength Index (RSI) to provide suitable overbought and oversold levels for intraday option traders. The IMI can help traders identify potential opportunities to initiate bullish or bearish trades in response to intraday price corrections or bumps in trends. IMI is calculated by dividing the sum of up days by the total of up and down days over a period, usually 14 days, with readings over 70 indicating overbought conditions and under 30 showing oversold levels.

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astro secretes
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Intraday Momentum Index – IMI

The Intraday Momentum Index is a good technical indicator for high-frequency option traders
looking to bet on intraday moves. It combines the concepts of intraday candlesticks and RSI, thereby
providing a suitable range (similar to RSI) for intraday trading by indicating overbought and oversold
levels. Using IMI, an options trader may be able to spot potential opportunities to initiate a bullish
trade in an up-trending market at an intraday correction or initiate a bearish trade in a down-
trending market at an intraday price bump.

It is important to be aware of the “trendiness” of the price moves. When there is a strong visible
uptrend or downtrend, momentum indicators will frequently show overbought/oversold readings.

To calculate the IMI, the sum of up days is divided by the sum of up days plus the sum of down days,
or ISup ÷ (ISup + IS down), which is then multiplied by 100. While the trader can choose the number
of days to look at, 14 days is the most common time frame. Like RSI, if the resulting number is
greater than 70, the stock is considered overbought. And if the resulting number is less than 30, the
stock is considered oversold.

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