31.The concept of "overbought" and "oversold" conditions is typically associated with which technical indicator? A. Moving Average Convergence Divergence (MACD) B. Bollinger Bands C. Stochastic Oscillator D. Fibonacci retracements
Question
31.The concept of "overbought" and "oversold" conditions is typically associated with which technical indicator? A. Moving Average Convergence Divergence (MACD) B. Bollinger Bands C. Stochastic Oscillator D. Fibonacci retracements
Solution
The concept of "overbought" and "oversold" conditions is typically associated with the Stochastic Oscillator. So, the answer is C. Stochastic Oscillator.
Here's a step-by-step explanation:
-
The Stochastic Oscillator is a momentum indicator that shows the location of the close relative to the high-low range over a set number of periods.
-
It follows the speed or the momentum of the price. As a rule, the momentum changes direction before the price.
-
An asset is usually considered overbought when the Stochastic Oscillator is above 80 and oversold when it is below 20.
-
Traders use these levels to help them decide when to buy or sell an asset.
-
Therefore, the concept of "overbought" and "oversold" conditions is typically associated with the Stochastic Oscillator.
Similar Questions
Which of the following technical indicator compares the strength on buy and sell in order to find out whether a stock is overbought or oversold?Question 19Select one:a.On-balance volumeb.Relative strength indexc.Moving averaged.Moving average convergence and divergence
Which technical analysis tool helps identify potential trend reversals by comparing a stock's closing price to its price range over a specific period? A. Bollinger Bands B. Relative Strength Index (RSI) C. MACD (Moving Average Convergence Divergence) D. Stochastic Oscillator
Which technical analysis tool compares a stock's closing price to its price range over a given period of time to help spot possible trend reversals? A. Bollinger Bands B. Relative Strength Index (RSI) C. MACD (Moving Average Convergence Divergence) D. Stochastic Oscillator
Fibonacci retracement levels are used in technical analysis to: A. Predict earnings per share B. Identify potential reversal levels in a stock's price C. Evaluate a company's debt ratio D. Measure market volatility
When does a circuit is said to be overloaded?
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.