Bollinger Bands Stocks Price Action in Ranging Stocks Markets

Bollinger Bands Stocks Indicator is also used to identify periods when a stocks market stocks trend is overextended. The guidelines below are considered when applying this stocks indicator to a sideways stock trend.

Bollinger Bands Stocks Indicator is very important because it is used to give stocks signals that a stocks price breakout may be upcoming.

During a stocks trending market these techniques do not hold, this only holds as long as Bollinger Bands are pointing sideways.

• If the stock market price touches the upper band it can be considered overextended on the upside - overbought.
• If the stock market price touches the lower band the stocks price can be considered overextended on the bottom side - oversold.

One of the uses of Stocks Bollinger Bands indicator is to use the above overbought and oversold stocks guidelines to establish buy & sell targets during a ranging stocks market.

• If stocks price has bounced off the lower band crossed the center-line moving average then the upper band can be used a sell level.
• If stocks price bounces down off the upper band crosses below the center moving average the lower band can be used as a buy level.

Trading Bollinger Bands in Ranging Stocks Markets - Bollinger Bands Stocks Strategy

In the above ranging stocks market the instances when the price hits the upper or lower bands can be used as profit targets for long/short stocks trade positions.

Stocks trades can be opened when the stocks market hits the upper resistance level or lower support level. A stop loss order should be placed a few pips above or below depending on the stocks trade opened, just in case the stocks price action breaks out of the range within these Bollinger bands.