Momentum Indicators No Match For Price, Volume Stock Charts.(B)(INVESTOR'S CORNER)

Byline: JUAN CARLOS ARANCIBIA

For serious investors, trading software crammed with multicolor indicators like oscillators and stochastics can be mesmerizing to watch.

But these indicators can give investors sensory overload. Worse, they may give false signals.

Price-momentum indicators compare recent price changes to formulated overbought or oversold signals. The premise here is that an overbought stock is due to turn lower, an oversold security is primed to rally.

If only it were that easy.

One of the main drawbacks of these indicators is that they may give overbought signals when a stock breaks out from a strong base, or cause …