Stochastic Oscillator
Also called: stochastics, stoch
A momentum oscillator (0–100) comparing the close to the recent high-low range — above 80 is overbought, below 20 oversold.
Developed by George Lane, the stochastic oscillator measures where today's close sits within the high-low range of the last N periods (commonly 14). A %K line and a slower %D signal line oscillate between 0 and 100: high readings mean closes are clustering near the top of the range (strong momentum), low readings near the bottom.
Traders watch %K crossing %D, overbought/oversold extremes, and divergence from price. Like RSI, 'overbought' can persist in a strong trend, so the stochastic works best as context and in confluence with structure.
On StockSetups
Stochastic %K is one of the 30+ indicators on every StockSetups signal and a screener field, so you can filter the board for names turning up from oversold or rolling over from overbought.
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