> For the complete documentation index, see [llms.txt](https://gorilli.gitbook.io/gorillionaire/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://gorilli.gitbook.io/gorillionaire/available-signals/stochastic.md).

# Stochastic

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The Stochastic Oscillator is a momentum indicator that compares a security's closing price to its price range over a specific period. It helps identify overbought and oversold conditions in the market.&#x20;

* Readings above 80 typically suggest an overbought condition and may result in potential price pullback
* Readings below 20 suggest an oversold condition, which means a possible upward move.

It consists of two lines: %k (the main line) and %D (a moving average of %k). Crossovers between these lines can signal potential trend reversal.&#x20;

The stochastic oscillator is particularly useful in ranging markets to anticipate shifts in momentum before price changes occur.&#x20;