The KD Stochastic is a popular indicator in the oscillator family, which is one of the largest tools in the technical analysis toolkit. The Stochastic indicator tells you the position of a security within its recent range in % terms: 1% means it’s at the lowest 1% of the recent range, and 99% conversely that the security is the top of the price range of the last few days. The KD spread is the spread between a short stochastic (D is the 3 days stochastic) and a longer one (K is the 14 days one)
Oscillators are used to gauge bottoms/tops and inversions. The theory is that if the oscillator is close to the bottom of its range, then so is the stock and vice versa.