Overbought

Example

Say a stock’s highest high over the last 14 candles is $30.00, its lowest low $26.00, and the latest close $29.60. The stochastic %K is 100 × ($29.60 − $26.00) ÷ $4.00 = 90, above the usual 80 overbought line. That only says the close sits near the top of the range; in a steady rally the next several closes can land there too.

Hypothetical numbers, for illustration only.