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Monday, November 7, 2011

K39 - The Last Stochastic Technique

Most people are already familiar with the use of Stochastic as a momentum indicator. However, few may have heard of "K39 - The Last Stochastic Technique". This setup consists of two indicators:

1. Stochastic Oscillator, setting:  %K=39 and %D=0
2. OBV and its M30 ( M30 = 30 SMA of the OBV )

A buy signal is generated when :
1. K39 line crosses the 50% line from below;
2. OBV line must be above the M30 line.
See green arrows in the chart.

A sell signal is generated when:
1. K39 line crosses the 50% line from above;
2. OBV line must be below the M30 line.
See red arrows in the chart.

For details, please refer to the website of ( click HERE ).

Although K39 is a trend following indicator, it does generate very early and reliable signals ( see examples below ):

I have been familiar with this indicator for 2~3 years now but haven't been too serious about it. I will try to pay more attention to it from now on and will post here counters with fresh buy signals.