Analysis of Stochastic Oscillator Indicator

A lot of silver trading information can be gathered from the shapes and duration of the trading market tops and bottoms of the stochastic oscillator indicator.

The amount of time that silver stays overbought or oversold is an important factor when analyzing the strength of the trading market trends.

Trading Market Tops

Narrow silver market top that does not reach very high above 80 %

Narrow silver market tops means that the bulls are weak, and that the silver trading bears have overpowered the silver trading bulls very quickly. This means that the silver trading bears might push the price further down without much resistance from the silver trading bulls.

Very high, wide silver market tops

Wide silver market tops mean that the silver trading bulls are very powerful much more than the silver trading bears and the ensuing short term silver trend reversal (retracement), will be very short lived. Retracement on the stochastic oscillator indicator will not even reach the oversold areas before stochastic oscillator indicator moves back to the over bought areas.

Trading Market Bottoms

A narrow silver market bottom that doesn't reach very deep below 20%

The narrow silver market bottom means that silver trading bears are weak in their attempt to push the price down, the silver trading bulls have gained control of the price pretty fast so the price movement upwards will continue for a while. And the upward silver market silver trend will continue for a while.

Very wide, deep silver market bottoms

A wide silver market bottoms is a sign that the silver trading bears are very strong and the silver sellers are in control of the price, therefore any retracement upwards will not stay for long.