Worden Stochastics is an indicator used in technical analysis that determines the direction of a stock’s momentum by comparing a stock’s current closing price to its prior prices. To calculate the Worden Stochastics, it takes the closing price from the past 14 days and ranks it according to its percentile, with 0 being the lowest percentile and 100 being the highest percentile. After calculating the percentile of the closing price, the formula transforms the percentile into a number between 0 and 100. The result is then used to find a stock’s overbought and oversold levels.

A reading of greater than 80 is considered overbought while one of less than 20 is considered to be oversold. The advantage of using Worden Stochastics over other technical analysis indicators is that it places more focus on the recent closing value as opposed to the past price movements.

Unlike other stochastics, the Worden Stochastics does not display crossovers that trigger buy and sell signals. Since the indicator does not provide any critical information about future trends, it is often used in combination with other technical analysis indicators such as relative strength index (RSI) and moving average convergence divergence (MACD).

Worden Stochastics is a valuable technical analysis tool that can help traders identify potential buy and sell opportunities. While other stochastic indicators focus on long-term trends, the Worden Stochastics is best suited to short-term fluctuations. This indicator helps traders spot overbought or oversold conditions and helps them identify potential trading opportunities. It also allows traders to identify any existing trends, as well as any potential reversal or continuation of these trends.