1, A term for indicators used to determine overbought and oversold conditions, often useful when a clear trend can’t easily be determined. Oscillators include stochastics, moving average convergence/divergence, relative strength index and momentum.
2, An technical indicator that determines when a market is in an overbought or oversold condition. When the oscillator reaches an upper extreme, the market is overbought. When the oscillator line reaches a lower extreme, the market is oversold.