Stochastic Oscillator

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Stochastic Oscillator

In technical analysis, an indicator of market momentum. A stochastic oscillator measures whether the closing price of a security is closer to the high or the low. It is based on the assumption that when a market is trending upward, the closing price will be closer to the highest price, and, when it is trending downward, the closing price will be closer to the lowest price. It is calculated as:

Stochastic Oscillator = 100 * (closing price for a given day - lowest price for the previous 14 trading days) / (highest price for the previous 14 trading days - lowest price for the previous 14 trading days).
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