Fast Stochastic ( FastSTO )
Both the Fast Stochastic and Slow Stochastic oscillators are used by market technicians as a timing indicator for signals of market reversal. The Fast Stochastic will provide more signals than the Slow Stochastic, although some analysts prefer the Slow Stochastic, believing it is less prone to whipsaws.
The Stochastic oscillator gives an indication of the stocks last closing price relative to the stocks recent trading range over a specifically identified period of time. George Lane, who developed this indicator, theorized that on up trends, prices tend to close near the high of the day's trading range, and in downtrends, prices tend to close near the low for the day's trading range. 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. Stochastics attempt to find trend reversals by measuring points in a rising trend where closing prices are near the lows of the day and vice versa.
The Stochastic indicator is plotted as two lines, the %D line and the %K line, with values ranging from 0 to 100. Readings above 80 are strong and could indicate that price is closing near its high. Readings below 20 are strong and could indicate that price is closing near its low.
A typical sell indication happens when either %K or %D rises above then falls below 80. Likewise, a typical buy indication is given when either %K or %D falls below 20 and then rises above it. Another signal that can be used is when %K rises above %D (buy signal) or when %K falls below %D (sell signal).