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Momentum

Awesome Oscillator

AO

Subtracts the 34-period SMA of the bar’s midpoint (high+low)/2 from the 5-period SMA of the same midpoint. The result oscillates around zero and reflects short-term momentum relative to a longer-term baseline.

Tips

The ‘saucer’ setup—two consecutive red bars followed by a green bar above zero—is Bill Williams’ preferred AO buy signal
Twin peaks divergence (second peak smaller than first, same side of zero) often marks momentum exhaustion before a reversal