Lane's Stochastic Divergence - Bullish Divergence and Bearish Divergence.

Lane's Stochastic (%D-Slow)

The Lane's Stochastic indicator developed by George Lane is one of the most useful and widely used momentum oscillators in technical analysis. Lane's Stochastic oscillator uses four indicators to combine relative strength with moving average methods into one. %K is an un smoothed RSI. %D is a moving average of %K (fast stochastic). %D-Slow is a longer-period moving average of %K, and finally %D-Slow (slow stochastic) Moving Avg. is another moving average on top of it. Like other overbought oversold oscillators they are normalized within a scale of 0 to 100. Buy/sell signals are generated by %D stochastic crossover with its moving average above 80% for overvalued or below 20% for undervalued stocks. The divergence between price and indicator is the most important buy/sell stocks trading signal. Using the Lane's Stochastic bullish divergence/bearish divergence should be considered together with other stock market trading alerts, trading indicator and technical trading techniques.