Stochastic Oscillator

The Stochastic Oscillator, developed by George Lane, is a momentum indicator that compares a market's closing price to its price range over a set lookback period, typically 14 periods, to judge where the close sits relative to recent highs and lows. It is plotted as two lines, %K and %D, oscillating between 0 and 100, with readings above 80 generally read as overbought and readings below 20 read as oversold. A crossover of the faster %K line above or below the slower %D line is commonly watched as a potential turning point, particularly when it occurs in the overbought or oversold zones.