Price Strength

What is price strength?

The price strength is a momentum indicator that measures how strongly the market is moving towards either a bullish or a bearish trend.

How is the price strength calculated in the context of the stock markets?

The total number of stocks that have hit their 52-week high is divided by the total number of stocks to calculate the % of stocks near their 52-week high. Similarly, the % of stocks near their 52-week low is calculated. The latter is then subtracted from the former to give us the price strength of the market.

What does the price strength indicate?

The higher the price-strength the more positive and bullish the market is, while a negative and falling price-strength indicates the market is bearish in its outlook

How does price strength affect MMI?

The price strength is a momentum indicator that signals whether the market is headed towards a bullish or a bearish phase. Combined with other indicators in the MMI, it helps identify whether the market is in a greed or fear zone.