Technical Analysis of Stochastic Oscillator Indicator

A lot of Stock Indices trading information can be gathered from the shapes & duration of the market tops & bottoms of the stochastic oscillator Stock Indices trading indicator.

The amount of time that the Indices price stays overbought or oversold is an important factor when analyzing the strength of the Indices market trends.

Indices Market Tops

Narrow Stock Indices market top that does not reach very high above 80%

Narrow Stock Indices market tops means that the bulls are weak, & that the Indices bears have overpowered the Indices bulls very quickly. This means that the Indices bears might push the Indices price further down without much resistance from the Indices bulls.

Very high, wide Indices market tops

Wide Indices market tops mean that the Indices bulls are very powerful much more than the Indices bears & the ensuing short term trend reversal (retracement), will be very short lived. The retracement on the stochastic oscillator Stock Indices trading indicator will not even reach the oversold levels before the stochastic oscillator Stock Indices indicator moves back to the overbought levels.

Indices Market Bottoms

A narrow Stock Indices market bottom that does not reach very deep below 20%

The narrow Stock Indices market bottom means that Stock Indices bears are weak in their attempt to push the Indices price down, Indices bulls have gained control of the Indices price pretty fast so the Indices price movement upward will continue for a while. And the upward Indices market trend will continue for a while.

Very wide, deep Stock Indices market bottoms

A wide Indices market bottom is a sign that the Indices bears are very strong & the Indices sellers are in control of the Indices price, therefore any retracement upward will not stay for long.