• Bollinger Bands® is a technical analysis tool developed by John Bollinger to generate oversold or overbought signals.

  • There are three lines that make up the Bollinger Bands: the simple moving average (middle band) and the upper and lower bands.
  • The upper and lower bands are usually 2 standard deviations +/- from the 20-day simple moving average (which is the center line), but they are subject to change.
  • When the price constantly touches the upper Bollinger band, it may indicate an overbought signal, while a constant touch of the lower band indicates an oversold signal.