what is the intraday momentum index imi 
the intraday momentum index imi is a technical indicator that combines aspects of candlestick analysis with the relative strength index rsi in order to generate overbought or oversold signals the intraday indicator was developed by market technician tushar chande to aid investors with their trading decisions understanding the intraday momentum index imi investors use technical indicators to estimate when a security such as a stock should be bought or sold technical analysis which uses technical indicators examines the relationship between a security s price and volume over varied periods of time indicators such as the relative strength index and bollinger bands seek to generate buy and sell signals without examining a security s fundamentals as such they are generally considered more useful for short term traders than long term investors the imi looks at the relationship between a security s open and close price over the course of the day rather than how the open close price varies between days it combines some features of the relative strength index namely the relationship between up closes and down closes and whether there is an indication that a stock is overbought or oversold with candlestick charts candlestick charts for a given day contain a real body highlighting the gap between the open and close price and price points above the high and low called upper and lower shadows technical analysts can use the imi to anticipate when a security is overbought or oversold the formula for imiimi d 1 n gains d 1 n gains d 1 n losses 100 where gains cp op on up days i e close open cp closing price op opening price losses op cp on down days i e open close d days n number of days 14 is typical begin aligned text imi left frac sum d 1 n text gains sum d 1 n text gains sum d 1 n text losses right times 100 textbf where text gains text cp text op on up days i e close text open text cp text closing price text op text opening price text losses text op text cp on down days i e open text close d text days n text number of days 14 is typical end aligned imi d 1n gains d 1n losses d 1n gains 100where gains cp op on up days i e close opencp closing priceop opening pricelosses op cp on down days i e open closed daysn number of days 14 is typical the imi is calculated as the sum of gains on up days divided by the sum of gains on up days plus the sum of losses on down days this is then multiplied by 100 if the resulting number is greater than 70 then the security is considered overbought while a reading of less than 30 indicates that a security is oversold the investor will look at the imi over a period of days with 14 days being the most common time frame to look at example using the intraday momentum indexlet s take a look at the intraday momentum index applied to the spdr s p 500 etf spy image by sabrina jiang investopedia 2021the chart above shows how oversold or overbought imi readings can generate buy and sell trade signals on a popular index while these signals aren t always accurate they may provide a greater degree of accuracy than simply using the rsi many traders combine these insights with other forms of technical analysis to maximize their chances of a successful trade for example they may look for oversold conditions and a breakout from a chart pattern before entering into a long position 