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Sunday, May 29, 2011

The Stochastic indicator price momentum

The Stochastic indicator is price momentum, you have to pair with volume assessment for trade confirmation. The table below, on balance Volume (OBV) indicator is added along with 30 days in March as a signal line.

Note that a bullish OBV crossover in early November 1999 and again in early June 2000 immediately after the K line is back above 50%. Although the Last Stochastic reversed in April, the OBV crossover did not happen. When the K line moved above 50% again in early June, immediately after confirmation.

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