Technical Tools

Traders can use several tools that are called oscillators. As the name implies, these go up and down on a range of figures, which may be labelled something like 0% to 100%, or 0 to 2, depending how they are set up. What they all have in common is that they are indicators of whether a stock is overbought or oversold – when the oscillator is in the middle of its range, it implies that the stock is fairly balanced in value, so we look for it to go significantly up, to say 80%, depending on the oscillator, or down to say 20%, to give us a clue that the prices are under pressure to change. Usually these are plotted as line charts, below the price chart.

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