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Stochastic Oscillator is a technical tool that identifies whether any underlying index is overbought or oversold. It is particularly helpful in the context of an underlying trend while identifying timing setups such as temporary over-sold conditions against the direction of the primary trend. It can be used individually or along with other studies such as volumes, moving averages etc. It can also be used to identify bullish or bearish divergences with respect to the underlying index price action so as to identify more important subsequent trend reversals.
Know more about the Stochastic Oscillator here.