Stochastic
a.k.a. Stochastic oscillator, Stochastics
An oscillator that shows where the latest close sits within the recent high–low range, used to spot overbought and oversold conditions.
The stochastic oscillator, popularised by George Lane, asks one question: is price closing near the top or the bottom of its recent range? A reading of 100 means the close is at the highest point of the lookback period; 0 means the lowest. It draws two lines, a fast %K and a slower %D.
Above 80 is traditionally overbought, below 20 oversold. Traders watch for the two lines crossing in those zones and for divergence with price. Like the RSI, it is happiest in ranges and can mislead in strong trends.
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