Bollinger Bands
A moving average plus volatility envelopes
What it is
A middle moving average with an upper and lower band set a number of standard deviations away, so the envelope widens and narrows with volatility.
What it may suggest
Contracting bands suggest compressed volatility and often precede expansion. A touch means price is far from its own recent average, not that it is far enough to turn.
Where it fails
Touching a band is not a signal. In a trend price can ride the outer band for a long stretch. The bands describe volatility, not direction.
Also called bollinger, bands, bollinger band squeeze.
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