Technical Analysis of Stochastic Oscillator Stocks Indicator

A lot of stocks information can be gathered from the shapes and duration of the stocks market tops and bottoms of the stochastic oscillator stocks indicator.

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

Stock Market Tops

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

Narrow stock trading market tops means that the bulls are weak, and that the stocks bears have overpowered the stocks bulls very quickly. This means that the stocks bears might push the stocks price further down without much resistance from the stocks bulls.

Very high, wide stocks market tops

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

Stock Market Bottoms

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

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

Very wide, deep stocks market bottoms

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