A Composite Momentum Oscillator for the Magnificent Seven Stocks
Summary
The indicator aggregates percentage price changes for a configurable basket that defaults to seven large technology stocks and permits two additional symbols. It offers modes for the basket, an equal-weight S&P 500 reference, or relative performance between the basket and that reference. The displayed composite uses an arithmetic average of active symbols; despite an input label for equal weighting, the alternative branch shown also averages the values rather than implementing market-cap weights.
Users can smooth the composite and select momentum, RSI-like, stochastic, Williams percent R, or CCI transformations. Thresholds classify readings as bullish, bearish, or neutral, while additional displays and alerts cover breadth, relative performance, and zero crossings. The source cites academic momentum research but presents no empirical results, portfolio rules, or evidence that its thresholds predict returns. Its outputs depend on symbol availability, lookback and smoothing settings, and the selected mode; a comparator ETF or index is a proxy for equal-weight broad-market performance.
Key ideas
- The composite averages percentage momentum across the active stock symbols.
- The default basket can be expanded with two optional tickers and compared with an equal-weight market proxy.
- Users can choose among five oscillator transformations and adjust smoothing and signal thresholds.
- Breadth and relative performance displays offer additional views of basket behavior.
- The supplied document cites research but gives no testing results, and its market-cap weighting option is not implemented in the shown calculation.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.