Using ROC as momentum indicator

What does ROC stand for? And how you can use it to determine the price momentum of a stock?
ROC stands for “rate of change”. It is used to predict if the stock price of a security will go up or down. If the ROC calculated is greater than 0 the stock price will go up. If the ROC is less than 0 (negative) then the stock will head down. The formula used for ROC is:

 ROC = (x - y) / y in n days interval.

Where:
x is the last closing price of the stock,
y is the past closing price.
n is the interval in number of days.

Usually, as a rule of thumb, short term investors use an n number between 15 to 50 days and long term investors use between 26 to 52 weeks.
As an example, let us look at the stock apple (AAPL). The last closing price was 204.45 and 15 days ago the closing price was 196.35
That is:  x = 204.45; y = 196.35; n = 15 days
Plug in the formula and you get:
ROC = (204.45-196.35) / 196.35 = 0.04

Therefore, ROC is greater than 0, implying the stock price is heading upward for a short period of time since we used a 15-day interval. If the old closing price is equal to the present closing price then the ROC is said to be at equilibrium and also equal to 0.
It is recommended to use ROC with other chart pattern techniques before making a final decision