What is momentum?
Momentum is the speed of the price move — how fast and how persistently the price is moving in one direction. High positive momentum means the stock has risen markedly over recent weeks or months. The idea is that moves tend to continue for a while — but also that what runs too fast often takes a break.
Momentum is the speed, not just the direction.
How it is measured
The simplest way: compare today's price with the price 3 or 6 months ago. If it is 20% higher, the stock has positive momentum. 20% lower, negative. More advanced measures such as RSI and MACD are essentially variations on the same question: how fast is it going, and is the speed increasing or fading?
Why it works — sometimes
Momentum is one of the few technical phenomena research has actually found again and again: stocks that rose over the past 6–12 months have on average continued slightly better than the market over the following months. The explanation is psychology — people are slow to notice good news and jump on with a delay.
But averages are not individual cases. Momentum reverses sharply, and when it turns, it turns fast. It is the most expensive strategy to be late to.
Momentum and overheating
Very high momentum — a stock that has doubled in a few months — is often also a stock that has run away from its own business. Then the price trades on expectations, not on numbers. That can continue for a long time. It can also stop tomorrow.
The typical beginner's mistake
Buying a stock that has risen 80% in three months "because it is running". You are buying what everyone else has already discovered, at the price they have driven it up to. Ask whether the company has kept up with the price.
How you see it in Kiggo
Kiggo's "Short term (days–weeks)" verdict is built on momentum figures like RSI and on whether the price sits above or below its moving averages. Tap the ring and Kiggo shows the figures behind it and explains them. Kiggo warns when the stock has "risen fast lately" — that is momentum translated into plain words.
Related terms
Frequently asked questions
Is momentum the same as a trend?
Nearly. The trend is the direction — up, down or sideways. Momentum is the speed in that direction. A stock can be in an uptrend with fading momentum: still rising, but more slowly. That is often an early sign the trend is getting tired.
What is MACD?
A momentum measure that compares a short and a long moving average. When the short one pulls away from the long one, momentum is increasing. It is popular with technical traders, but for a beginner RSI and the moving averages tell most of the same story.
Kiggo explains — Kiggo does not advise. We never tell you what to buy or sell, and key figures can only be compared between companies in the same industry. The decision is yours. Last updated 2026-09-07.
Written by Claus Frisch, founder of Kiggo. Not an adviser, not a bank — Kiggo explains, you decide.
