Where today's close sits within the last N-bar range. %K is raw, %D is a smoothed line. 80/20 are the classic overbought/oversold levels.
%K = 100 × (C − Low₁₄) / (High₁₄ − Low₁₄) %D = SMA(3) of %K
%K/%D crossovers, overbought/oversold reversals, divergence with price.
Very noisy on short settings. Same trending-market trap as RSI — can stay overbought for a long time.
Nifty 50 daily bars with Stochastic Oscillator pre-loaded:
No strategies on the site currently reference Stochastic Oscillator directly, but the technique is used across the discretionary trading landscape. Combine with a trend-following indicator or a volume filter for context.