The Stochastic Oscillator is a popular technical analysis tool used by traders to assess overbought and oversold conditions in the market. The common interpretations of the Stochastic Oscillator readings revolve around the concept of momentum and price reversals.

When the Stochastic Oscillator reading is above 80, it suggests that the market is overbought, indicating a potential reversal or pullback in price. This may be seen as an opportunity to sell or take profits. Conversely, when the reading falls below 20, it suggests that the market is oversold, signaling a potential price bounce or buying opportunity.

Another interpretation involves observing the crossovers of the two lines within the Stochastic Oscillator. When the faster line (often referred to as %K) crosses above the slower line (often referred to as %D) in the oversold territory, it generates a bullish signal, indicating a potential uptrend or buying opportunity. On the other hand, when the %K line crosses below %D in the overbought region, it generates a bearish signal, suggesting a potential downtrend or selling opportunity.

It is important to note that while these interpretations can provide valuable insights, they should not be used in isolation. Traders often combine Stochastic Oscillator readings with other technical indicators or price patterns to make more informed trading decisions.