From Big Charts - Bollinger bands:As stated in Steven Achelis's,...

From Big Charts - Bollinger bands:

As stated in Steven Achelis's, Technical Analysis from A to Z (Chicago: Irwin, 1995), Bollinger has the following to say about this indicator:


"Sharp price changes tend to occur after the bands tighten, after volatility lessens.

"When prices move outside the bands, a continuation of the current trend is implied.

"Bottoms and tops made outside the bands followed by bottoms and tops made inside the bands call for reversals in the trend.

"A move that originates at one band tends to go all the way to the other band. This observation is useful when projecting price targets." (p. 72)

This indicator is displayed in two bands that are plotted at standard deviation levels above and below a moving average. BigCharts calculates the moving average using a time period of 20 bars, i.e., 20 frequency intervals.

Bollinger Bands provide a view of the current trading range. They can be used with other indicators to determine when it’s time to buy or sell.

Comment:
Bollinger bands have provided a useful guide for RAU over the last 12 months. At present the bands are wide and RAU is trading just above the lower band.