Stochastic Momentum Index

Stochastic Momentum Index

The Stochastic Momentum Index (SMI) range from +100 to -100. Readings below 20 (above 80) are considered oversold (overbought). However, readings below 20 (above 80) are not necessarily bearish (bullish). Some of the best sell (buy) signals occurs when the oscillator moves from overbought (oversold) back below 80 (above 20).

stochastic momentum index

Note: A buy signal is generated when the SMI rises above -50, or when it crosses above the signal line. A sell signal is generated when the SMI falls below +50, or when it crosses below the signal line.