Definition
An indicator, on a scale from 0 to 100, that shows where the latest close sits within the high-to-low range of a recent period, often 14 periods.
The story
A reading of 90 means the latest close is near the top of the recent range; 10 means it's near the bottom. Readings above 80 are commonly labeled overbought and below 20 oversold, but in a strong trend the reading can stay there a long time. It was developed by George Lane in the late 1950s.
Why you'll see it
Along with RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence), it's one of the most widely used momentum indicators.
Connects to
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms