Stochastic Oscillator is a tool to know whether the stock is in momentum or not. I have created a Google Sheet to know whether the stock is ok to buy or not based in the Stochastic Oscilator. The formula is (Current Close Price - Lowest Low) / (Highest High - Lowest Low) * 100.
We have taken the 14 day period and got the current close Price and lowest low from the last 14 days. We have also calculated the highest high and lowest low from the last 14 days. And then we have calculated the K% Line. K% Slow or D% is the average of last 3 days. The Stochastic Oscillator line can be of two types, Fast and Slow. In the google sheet I have created both the lost to fund out if the stock is in overbought zone or oversold zone for both the line.
Now the formula to calculate to buy or sell is that. We check if the K% Fast is greater than the K% Slow and also if its lower than the 20 then it's a buy. And similarly for sell if the K% Fast is lower than the K% Slow and also if it's more than 80 then it's a sell signal. For other cases it is just hold or do nothing. So it's a very simple technique to know if the stock can be bought or sold.
I have created the Google sheet and also created a Nifty 50 list with the Stochastic Oscillator to tell if in the Nifty 59 list any stock to buy or sell. I have used Nifty 50 only because it's somewhat safe and can give us good readings. If we go with small cap, the volatility might nit br accurate to know if the stock is in that zone or not.
