How Does Momentum Work (in Investing)? - TheStreet Definition

Dictionary of Financial Terms

Refers to a company's technical price momentum or fundamental earnings momentum. Companies with strong momentum have prices and earnings that are going up, while companies with weak momentum have prices and earnings that are going down, or going nowhere.

Importantly, all momentum is measured at the margin, so a company with high momentum must accelerate to maintain its place, while a company with weak momentum can merely stabilize to get out of the doghouse.

Definitions of Financial Terms