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Momentum

Measure of price change over a defined period, indicating the strength and direction of a market trend.

Momentum measures the rate and direction of price change over a defined period. In oil markets, momentum indicators are widely used in technical analysis.

Strong upward momentum may indicate bullish sentiment driven by supply shortages or demand growth. Conversely, negative momentum can signal weakening fundamentals or risk-off behavior.

Traders use momentum to time entries and exits, often in conjunction with other indicators. Momentum-driven strategies can amplify price trends.

While useful, momentum signals can reverse quickly, especially in news-driven oil markets, requiring disciplined risk management.

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