In technical analyses of securities trading, the stochastic oscillator is a momentum indicator that uses support & resistance levels. The term stochastic refers to the location of a current price in relation to its price range over a period of time. This method attempts to predict price turning points by comparing the closing price of a security to its price range.
This calculation finds the range between an assets high & low price during a given period of time. The idea behind this indicator is that prices tend to close near the extremes of the recent range before the turning point.
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