• Introduction
• Bollinger Bands
• MACD
• Stochastics
• RSI
• More Indicators...

Bollinger Bands

Bollinger bands help you to evaluate a stock’s volatility over time. When plotting Bollinger bands on a chart will see one line above and one line below the price chart of the stock. When a stock is making major price movements or is very volatile its Bollinger bands will be farther away (expand) from the stock’s price chart. When a stock is moving steadily with minor price movements, the Bollinger bands will be closer to (contract upon) the stock’s price chart.

Bollinger Bounce

A common technical use of Bollinger bands is to predict when a stock’s price will “bounce” off the top or bottom Bollinger line and then return back towards the center of the Bollinger bands. Therefore, giving a bullish indicator to a stock whose price is close to or touching the bottom Bollinger band and a bearish indicator to a stock whose price is close to or touching the top Bollinger band.

Bollinger bands are intended to illustrate a stock’s current support and resistance levels. This means a low price the stock does well stays above (support) and a high price the stock has difficulty breaking past (resistance).

Bollinger Squeeze

Another common technique used to predict trends with Bollinger bands is called the Bollinger squeeze. When the bands contract so much that they begin to appear to “squeeze” the stock’s price chart, is when the Bollinger squeeze occurs. This is usually a a pending breakout which could be bullish or bearish. Should the stock’s price begin to break above the top Bollinger band it is a bullish sign that the stock with continue an upward trend. If the stock’s price breaks through the lower band, it is a bearish sign that the downward trend will most likely continue.

There are other techniques to determine trends with Bollinger bands. However, the Bollinger Bounce and the Bollinger Squeeze are the most commonly used, and now you know how to use them. Congrats!

Technical Indicators : Table of Contents

1. Introduction
2. Bollinger Bands
3. MACD
4. Stochastics
5. RSI
6. More Indicators...