Oversold

Example

Say a stock slides from $45 to $38 over two weeks, and its stochastic %K stays below 20 almost the whole way as each close lands near the bottom of the 14-day range. Buying the first oversold reading, near $43, would have meant sitting through another $5 of decline. The reading described the selling correctly all the way down; it did not mark the bottom.

Hypothetical numbers, for illustration only.