I have recently seen reference to the bollinger bands by a couple of posters, paying observation to the small range of trading that CCC is playing with at the moment. They are spot on with this call in my opinion.
Bollinger bands are a technical indicator used by traders, and are analogous to what elastic bands or springs do when they are pulled tight. The tighter these bollinger bands are around recent price action, the more violently they will snap open once price gets a wriggle on.
The end result? Once price moves outside the confined range, it will breakout very strongly in one direction or another. Bollinger bands do not indicate which direction price will go, but they can be use to predict future price fluctuations.
Here is one example from recent memory. For six weeks around the period of August 2010, SDL traded between 14c and 16c, seemingly ignoring whatever the market at large was doing at the time. Sounds like CCC, doesn't it? In early September 2010, this 2c range was broken, and the stock would go on to rally to 66.5c within the next four months.
The trading patterns for SDL prior to that very bullish movement were very similar to what we are seeing here with CCC right now: large funds had all the control over where the price would open and close. Sooner or later the funds messing around with SDL had to make some profit out of the whole ordeal, and what a profit there was to be made!
The most astonishing thing with SDL's rally was it was spurred on by next to no news of note. Wishful thinking, or food for thought? I'll leave it with you to decide.
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