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Non-Tech : Any info about Iomega (IOM)? -- Ignore unavailable to you. Want to Upgrade?

To: FuzzFace who wrote (36753)	11/20/1997 10:14:00 PM
From: SR/WA	Read Replies (1) \| Respond to of 58324

Hope this helps: Stochastics: This is part of a larger Technical Analysis site provided by Equity Analytics, Ltd. The stochastic oscillator compares where a security's price has closed relative to its price range over a specifically identified period of time. George Lane, who developed this indicator, theorized that in an upwardly trending market, prices tend to close near their high; and during a downward trending market, prices tend to close near their low. Further, as an upward trend matures, price tends to close further away from its high; and as a downward trend matures, price tends to close away from its low. The stochastic indicator attempts to determine when prices start to cluster around their low of the day for an uptrending market, and when the tend to cluster around their high in a downtrending market. Lane's theory is these are the conditions which indicate a trend reversal is beginning to occur. The stochastic indicator is plotted as two lines. They are the %D line and the K line. The D line is more important than the K line. The stochastic is plotted on a chart with values ranging from 0 to 100. The value can never fall below 0 or above 100. Readings above 80 are strong and indicate that price is closing near its high. Readings below 20 are strong and indicate that price is closing near its low. Ordinarily, the %K line will change direction before the D line. However, when the D line changes direction prior to the K line, a slow and steady reversal is usually indicated. When both %K and D lines change direction, and the faster K line subsequently changes direction to retest a crossing of the D line, but doesn't cross it, this is a good confirmation of the stability of the prior reversal. A very powerful move is underway when the indicator reaches its extremes around 0 and 100. Following a pullback in price, if the indicator retests these extremes, a good entry point is indicated. Many times, when the %K or D lines begin to flatten out, this is an indication that the trend will reverse during the next trading range. Quite often, divergence's set up on the chart. That is, price may be making higher highs, but the stochastic oscillator is making lower lows. Or conversely, price may be making lower highs, and the stochastic oscillator is making higher highs. In either case, the indicator usually is demonstrating a change in price before price itself is changing. The formula for %k is as follows: %K = 100[(C - L5close)/(H5 - L5)] Where: C = the most recent close L5 = the lowest low for the last 5 trading periods H5 = highest high for the same five trading periods %D is a smoothed version of the K line. Usually, 3 periods is used. The K formulas is as follows: %D = 100 X (H3/L3) Where: H3 = the 3 period sum of (C - L5) L3 = the 3 period sum of (H5 - L5)

To: FuzzFace who wrote (36753)	11/20/1997 10:27:00 PM
From: KM	Read Replies (2) \| Respond to of 58324

Edwin: All Right . . . I'll quit watching "Married With Children" long enough to explain <GG> From: ilhawaii.net Part 3: Technical Analysis & Spread Trading Subject: Stochastics Stochastics simply attempt to indicate where the current price is as a percentage value in relation to the high and low extremes of price swings during a set time period. At this set time period the stochastics work on the assumption that an overbought condition exists when the stochastics is in the area above 50% and oversold when prices put the stochastics below 50%. Traders generally use 70% or 30% for better signals and an 80 to 20% or 90--10% can also be used. The best way to find which indicator is to run the stochastics and see at what threshold works with the least false signals. Also, it may be necessary to adjust the set time period and or the sum of the days being used. The basic calculation is this; Sum of X # days of( Close - X # of days low) ---------------------------------------------------- Sum of X # days of( X days high - X # days low) Example; Sum of 3 days of the close minus the low of the last 10 days. Divided by Sum of 3 days of the 10 day high minus the 10 day low. So if our high is 100 and the low is 80 for the last 10 days. day 1 close = 95 minus 10 day low of 80 = 15 day 2 close = 90 minus 10 day low of 80 = 10 day 3 close = 85 minus 10 day low of 80 = 5 Sum 30 A three day sum of the high minus the low = 60 30/60 = 50% Thus, the price range over the last 3 days of trading has been at 50% of the range over the last 10 days. The trick is to find what sum of days and what range of highs/lows most accurately matches the highs and lows of the stock or futures being followed, and in markets that are in a up or down trend, when to take only the buy or sell signals. --------------- Virtually every technical analysis software title has the stochastics function built-in, along with the related indicator %R (which is the raw stochastic value charted on an inverted scale). I find stochastics/%R valuable when used with other turning point indicators, provided their speed matches the trading time frames.