• The strategy we will be implementing today is Stochastic
• The stochastic oscillator is a popular technical indicator for generating overbought and oversold signals
• The stochastic oscillator is a momentum indicator that compares a particular stock’s closing price to a range of its prices over a certain period of time. The oscillator’s sensitivity to market movements can be reduced by adjusting for this period or by taking a moving average.
• The stochastic oscillator measures the price momentum to identify trends and predict reversals.

Stochastic Positive Crossover

• Stochastic Positive crossover is a bullish cross
• When the stochastic lines are above 80, the indicator signals that the instrument is overbought.
• The Stochastic Oscillator measures the current price on a scale of 0 to 100, with readings above 80 indicating the stocks are overbought and readings below 20 indicating it is oversold.
• Let’s look at an example in the chart below (TATAMOTORS a daily time frame)

A buy signal is triggered when the Stochastic line is below the overbought line, which traders consider a buy signal, let’s look at a few opportunities in the LIVE market

Stochastic Negative Crossover

• Stochastic Negative crossover is a bearish cross
•  When the stochastic lines are below 20, it signals that the instrument is oversold.
• Let’s look at an example in the chart below (ASIANPAINT a daily time frame)

A stochastic line is above the overbought line, which traders consider as a sell signal, let’s look at a few opportunities in the LIVE market

Awesome, but what’s my takeaway?

• RELIANCE, TATAMOTORS, HEROMOTOCO, SUNPHARMA and  TCS  have given a buy call on a daily time frame (implementing Stochastic  Positive crossover)
• APOLLOHOSPl, DIVISLAB, ASIANPAINT, BRITANNIA  and MARUTI  have given a sell call on a daily time frame (implementing Stochastic  Negative Crossover)