Inside this article you will find companies that show a potential Buy signals according to a well-known indicator that is based on the volatility of a financial instrument: Bollinger Bands.
What are Bollinger bands?
Bollinger Bands are calculated by applying a volatility coefficient (2x Standard Deviation) to the 10-day (or 20-day) simple moving average of a financial instrument.
The price chart displays two bands around the 10-day (or 20-day) simple moving average and potential buy signals are generated based on contact with them.
Bollinger Bands – types of signals
Bollinger Bands mainly provide 3 types of buy signals within an underlying positive trend:
- The price rises above the upper band after a squeeze (moment of low volatility) to continue the positive trend
- The price exceeds the lower band downwards and immediately afterwards recovers overcoming it upwards to follow the positive trend
- The price rebounds on the lower band and tries to continue the positive trend
Below the companies that showed a potential buy signal according to 1 (or all 3) type of events just described.
None of the patterns below guarantee success because there may be false buy signals. The purpose of this analysis is purely informative.
Principia Biopharma Inc (PRNB)
CME Group Inc (CME)
Opera Limited (OPRA)
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This analysis shows the buy signals from the Bollinger Bands indicator. If you are interested in the other types of chart patterns click here.
If you are interested in a overall analysis of companies taking into account different types of data (including business growth, analysts expectations and transactions by Hedge Funds / Insiders), summarizing all information in a score, I’ m waiting for you here for my Score-Card analysis.
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DISCLAIMER: The information in this blog post represents my own analysis/opinions and does not contain a recommendation for any particular security or investment. Stocks trading involves substantial risk of loss and is not suitable for every investor. Trade responsibly.