What does the Stochastic number represent?
The Stochastic Oscillator was developed by Dr. George Lane. The Stochastic Oscillator relates closing price to the range of closing prices over a certain time period. The Stochastic Oscillator presents two values, %K and %D. The Stochastic Oscillator gives values in the range of 0% to 100%. A value of 0% indicates that the issue’s closing price was the lowest closing price over the specified period of time. A value of 100% indicates that the issue’s close was the highest price close over the specified period. Value levels of 20 and below are considered oversold and values of 80 and above are considered overbought. There are three types of Stochastic Oscillators; fast, slow, and full.
