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Glossary · Pro tools

Stochastic oscillator

Where today’s close sits within the last 14 days’ high to low range, from 0 to 100.

Why it matters

Rising prices tend to close near the top of their range, falling prices near the bottom. %K is the reading; %D is its 3-day average.

How to read it

Above 80 is overbought, below 20 oversold. %K crossing %D is read as a turn. Like RSI, it can stay extreme in strong trends.

Also called: stoch, %K, %D

Related

RSI (Relative Strength Index)A 0 to 100 gauge of how hard a stock has been bought or sold over the last 14 days.Stochastic RSIThe stochastic formula applied to RSI instead of price.Williams %RLike the stochastic, drawn upside down: 0 is the top of the recent range and −100 the bottom.

In the Cluenex app, this explanation opens next to every stochastic oscillator figure, with the live reading for the stock you are looking at. Open it in Cluenex