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.
The Accumulation/Distribution Line (A/D) measures the supply and demand of an asset or security by looking at where price closed in a period range and then multiplying that by volume.
A bull trap means a reversal that forces market participants who are on the wrong side of the price movement to close positions with unexpected losses.
A bullish engulfing pattern is a candlestick pattern that forms when a small black candlestick the next day is followed by a large white candlestick whose body completely overlaps or engulfs the body of the previous day’s candlestick.
Capitulation occurs when a significant proportion of investors give in to fear and sell within a short period of time, resulting in a sharp drop in the price of a security or market against a backdrop of high trading volume.
Consolidation is a technical analysis term used to describe the price movement of a stock within a given range of support and resistance over a period of time.
The Directional Movement Index (DMI) is a technical indicator that measures both the strength and direction of price movement and is designed to reduce false signals.