SmoothedStochastic

Return value of the smoothed stochastic oscillator for the selected price. Also known as the slow stochastic.

Syntax:

Calculation :

The calculation of the %D is similar to the stochastic rapid but with the smoothing the signals are more regular.

%D(y) = 100 * (H(y)/B(y))

with :

H(y) : sum of C – PH(n) on X days ago

B(y) : sum of PH(n) – PB(n) on X days ago

C days : today’s close

PB(n) day : lowest on n period

PH(n) : Highest on n period

n : period

A sell signal is given when a bearish divergence appears. A bearish divergence occurs when the stock price makes new highs while the smoothedstochastic fails to make new highs.

A buy signals is given when a bullish divergence appears. A bullish divergece occurs when the stock price makes new lows while the smoothestochastic fails to make new lows.

When %k and %d are under the 20 level, there is a bullish signal when %k rises above %d and when the two lines rise above the 20 level. When %d and %k are above the 80 level, it is a bearish signal when %k falls below %d and when the two lines falls below the 80 level.

Example:

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