When the KST moves above the moving average, this signals a bullish movement. On the other hand, a bearish signal will be generated whenever the KST dips below the moving average. For any investors interested in the 2-6 week period, the short-term KST is a good measurement to use. For 6-39 weeks, the intermediate-term KST can be used and the long-term KST technical event covers anything larger than this for up to two years.
As the price interacts over different time spans, it will be determined by this whereas oscillators normally consider just one time span. Using four different time spans, the price doesn’t ignore the cycles of each specific period and each can be somewhat ‘smoothed’ by applying moving average. According to the length of time, each moving average is weighted which means that shorter periods of time will have less weight than a longer period of time. Because shorter time spans are included, price moves will lead to a quick change of direction for the KST.
With KST being interpreted in much the same way as other oscillators, a bearish and bullish movement will be seen when they cross below and above the moving average respectively. Over time, the pattern will need to be confirmed and this is done using trend line violation, price breakout, or moving average crossover. Even though there are three main time frames, KST can be calculated for any other time period.