What does the third line in the KDJ line mean in stocks?

The meanings of the three lines in KDJ line are as follows:

K-line is a quick confirmation line-the value above 90 is overbought, and the value below 10 is oversold;

Line D is a slow trunk line-the value above 80 is overbought and the value below 20 is oversold;

J-line is a direction sensitive line. When the j value is greater than 90, especially for more than 5 consecutive days, the stock price will at least form a short-term head, while when the j value is less than 10, especially for more than several consecutive days, the stock price will at least form a short-term bottom.

Extended data:

Skills of using KDJ index

The values of 1, k and d are always between 0 and 100. When d is greater than 80, the market is overbought. When d is less than 20, the market is oversold.

2. In the upward trend, when the K value is greater than the D value, when the K line breaks through the D line, it is a buy signal. In the downtrend, the K value is less than the D value, and when the K line falls below the D line, it is a selling signal.

3.KD indicator can not only reflect the overbought and oversold degree of the market, but also send out buying and selling signals through cross-breakthrough.

4.KD index is not suitable for stocks with small circulation and inactive trading, but KD index is extremely accurate for large-cap stocks and popular large-cap stocks.

5. When the stochastic indicator deviates from the stock price, it is generally a turning point signal.

6. The rising or falling speed of K value and D value is weakened and tends to be gentle, which is an early warning signal for short-term improvement.

Baidu Encyclopedia -KDJ Index