Stochastic

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Definition

The Stochastic Oscillator is a momentum indicator. It shows when the market's momentum is increasing speed or slowing down. It can help determine whether the company is overbought or oversold.

Formula

YCharts calculates it as the following:

The Stochastic Oscillator has two different lines, %K and %D. The %D is a 3-day moving average of %K. The two are calculated as follows:

%K = [(Last Closing Price - Lowest Closing Price for period) / (Highest Closing Price for Period - Lowest Closing Price for Period)] x 100

%D = (Sum of last three %K values / 3) for a rolling three-day period

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