What is Momentum?
The tendency of a stock's recent price trend to continue.
In Depth
Momentum investing buys stocks that have risen recently and sells stocks that have fallen, on the empirical premise that price trends persist over short horizons (3–12 months). It's a factor distinct from value and quality, often used in trend-following systems and quantitative strategies.
Example
A stock up 25% over the past six months while the market is flat exhibits strong positive momentum.