Skip to main content
Track Trendline
50 / 53
Search the archiveLibrary
Library

2018issue C0948-56

Weekly and daily Stochastic oscillator construction on a single daily chart

A daily chart can host a shorter-lookback Stochastic oscillator and a longer-lookback Stochastic oscillator computed from the same high, low, and close series. Documented studies smooth each series with a Moving average, plot shared reference levels, and leave matching Trendlines to be drawn by hand.

  • A shorter-lookback Stochastic oscillator and a longer-lookback Stochastic oscillator can be computed from the same daily high, low, and close series without switching the chart interval.
  • Each raw reading is close minus the lookback low, divided by the lookback high-low range, scaled by 100, then smoothed with a Moving average.
  • Documented studies default the pair to 14 and 70 bars with 3-bar smoothing, plot levels at 80, 20, and a midline, and return both values together.
  • Trendlines that match the source figures must be drawn by hand as static chart lines, because the spreadsheet reconstruction has no reliable coded method for placing them dynamically.
Entries in this reading3 entries
Current trackTrendline128 readingsStochastic oscillator170 readingsMoving average449 readings

Two lookbacks on one daily stream

A daily-chart construction can compute a shorter-lookback Stochastic oscillator and a longer-lookback Stochastic oscillator from the same daily high, low, and close series rather than switching the chart interval.

The same dual-oscillator construction appears as a lower-pane study on a one-year daily index chart and as a daily equity study that plots both oscillators together.

Raw reading, Moving average, and reference levels

Each raw Stochastic oscillator is defined as close minus the lookback low, divided by the lookback high-low range, then scaled by 100, after which a simple Moving average is applied to that series.

One documented implementation uses lookbacks of 14 and 70 bars, each smoothed with a 3-bar Moving average, and plots reference levels at 80, 20, and a midline halfway between those bounds.

A weekly-and-daily study without trading rules

A second implementation names the pair a weekly-and-daily Stochastic oscillator study, exposes configurable daily and weekly periods, and defaults those periods to 14 and 70 with 3-bar smoothing on each. That implementation draws horizontal bands at 20, 50, and 80 and returns the daily Stochastic oscillator value alongside the longer-lookback Stochastic oscillator value.

A third implementation notes that the source article does not supply trading rules and that slow-stochastic practices for the %K and %D pair still apply to the dual-horizon construction.

Spreadsheet traces and static Trendlines

A spreadsheet reconstruction lets the user change the two sampling intervals, then compare the weekly-interval and daily-interval Stochastic oscillator traces with price action on the same worksheet.

The spreadsheet author states there is no reliable coded method in that workbook to draw Trendlines dynamically, so Trendlines matching the source figures must be added by hand as static chart lines.

Daily and weekly Stochastic oscillators on Russell 2000 daily bars

On one Russell 2000 daily stream the 14-day Stochastic, smoothed over three days, swings between oversold and overbought several times, while the 70-day Stochastic, also smoothed over three days, turns more slowly. After the August 2015 break the fast line spikes back toward 80 while the slow line stays near 30, a split that only appears because both lookbacks share the same highs, lows, and closes. Points were read from the spreadsheet plot (0–100 scale, dashed midline at 50) for 9 March 2015 through 23 September 2015.
On one Russell 2000 daily stream the 14-day Stochastic, smoothed over three days, swings between oversold and overbought several times, while the 70-day Stochastic, also smoothed over three days, turns more slowly. After the August 2015 break the fast line spikes back toward 80 while the slow line stays near 30, a split that only appears because both lookbacks share the same highs, lows, and closes. Points were read from the spreadsheet plot (0–100 scale, dashed midline at 50) for 9 March 2015 through 23 September 2015.Russell 2000 · Daily · 2015-03-09T00:00:00.000Z to 2015-09-23T00:00:00.000Z

Spreadsheet controls fix daily length 14 with smoothing 3 and weekly length 70 with smoothing 3. Readings are taken from the published screenshot, so oscillator points are approximate to a few units. Hand-drawn static trendlines mentioned in the source are not part of these series.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
50 of 53 in the Trendline track
201824-29 pp.Next on TrendlineConstructing trendlines, support, and breakout targets from crowd exitsSupport, resistance, and trend activity are the three basic chart constructions used to read how many independent participants think about the next price.
All readings on this track · 53 readings
  1. 1984Constructing the slow stochastic from a five-session range
  2. 1985Gold-proxy trendlines and a January support base
  3. 1988Construct a five-week new-highs total as a breadth chart
  4. 1988Stacked channel, trendline, and moving-average warnings in 1987
  5. 1989Auditing fifth-wave counts with equality, Fibonacci, and trendlines
  6. 1990Money-fund maturity as a companion Eurodollar chart
  7. 1990Constructing wave targets from ratios, triangles and trendlines
  8. 1992Nested time frames for trend and channel signals
  9. 1992A pre-trade checklist for trendline breaks and loss limits
  10. 1992Bond-fund timing inside trendlines, retracements, and dual averages
  11. 1992Two-point trendline construction from rise over run
  12. 1993Disposable chart ratings from confirmed level tests
  13. 1993When trend channels define fair value after dislocations
  14. 1993Valid trendline anchors for three-part reversals
  15. 1994Pairing stochastic divergence with trendline invalidation
  16. 1995Constructing measured targets after trendline breaks
  17. 1997A three-part pullback plan with RSI, Fibonacci retracements, and a tight trendline
  18. 1998Rule-based Trendline construction for testable entries
  19. 2000Constructing trendlines, breaks, and role reversal
  20. 2000Constructing speed resistance lines from trend extremes
  21. 2000Nasdaq tech cycle stages with a 15-day average and trendlines
  22. 2002Two-session candlesticks that test support, resistance, and trendlines
  23. 2002Constructing Fibonacci ratio grids from a peak and a trough
  24. 2002Evaluate trendline geometry before trusting a breakout
  25. 2002Trendline, volume, and breakout hypotheses versus cycle-end stories
  26. 2003Writing the long S&P 500 trendline and cycle junction as one hypothesis
  27. 2003A three-event trendline reversal checklist
  28. 2003Reverse-engineered Relative Strength Index price curves
  29. 2003Two-anchor trendline construction without cut-through
  30. 2004Treat a 15-minute e-mini stair-step as congestion under a daily lid
  31. 2005A 50-day average, a trendline break, and an open barrier flip
  32. 2005Matching a forty-day average to a crude trendline
  33. 2006Constructing a relative spread-strength oscillator for staged cycle confirmation
  34. 2006Constructing a log-change probability line for trend and range rules
  35. 2007Linked cross breaks as dollar-pair filters
  36. 2007A case study in support, resistance, and trendline role reversal on currency charts
  37. 2007Reading trendline breaks in a housing-sector case
  38. 2007Constructing replaceable trendlines for break signals
  39. 2007Reading trendline breaks before the mechanical signal
  40. 2007Trading choppy forex trends with channels and Fibonacci breaks
  41. 2007A stacked hypothesis from wave, trendline, ratio, and candle
  42. 2008Exit rules before entry: trendline, support, and stops
  43. 2008Capitulation headlines need trend confirmation
  44. 2008RSI divergence classes, ratio thresholds, and trendline tests
  45. 2010Support and resistance as falsifiable chart hypotheses
  46. 2012Reading a 2012 software directory as a breakout and channel case study
  47. 2013Treat a currency position as a regime, then map shared levels
  48. 2014Evaluating trendline swing size per market
  49. 2018Intermarket regime stress and the January 2018 trendline break
  50. 2018Weekly and daily Stochastic oscillator construction on a single daily chart
  51. 2018Constructing trendlines, support, and breakout targets from crowd exits
  52. 2019Trendline break and Fibonacci retracement as a falsifiable outlook check
  53. 2019Monthly S&P 500 false-break versus the decade trendline
By fieldIndicators and filters682 readingsBy year201898 readings
All 128 readings tagged Trendline
Also on Trendline5 readings
1984Constructing the slow stochastic from a five-session range1994Pairing stochastic divergence with trendline invalidation1988Stacked channel, trendline, and moving-average warnings in 19871990Money-fund maturity as a companion Eurodollar chart1991Trend as persistence, not a straight line