The Chande Momentum Oscillator (CMO), developed by Tushar Chande, is a momentum indicator that measures the difference between the sum of recent gains and the sum of recent losses as a percentage of the total price movement over a specified lookback period — typically 20 periods. It is calculated as: CMO = [(Sum of Up Days – Sum of Down Days) ÷ (Sum of Up Days + Sum of Down Days)] × 100. CMO oscillates between -100 (extreme bearish momentum) and +100 (extreme bullish momentum), with zero as the neutral midpoint. Readings above +50 indicate strong bullish momentum, while readings below -50 indicate strong bearish momentum. Unlike RSI, which uses average gains and losses over a fixed period and smooths the data with a moving average, the CMO uses raw price changes without smoothing — making it more sensitive and responsive to momentum shifts. In Indian equity markets, CMO is used to identify strong momentum stocks and indices for trend-following strategies, detect overbought and oversold extremes for contrarian entries, and identify momentum divergences that signal impending trend reversals in Nifty 50, Bank Nifty, and individual large-cap stocks.
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