Bollinger Bands and the squeeze
A 20-day average with bands two standard deviations above and below.
Technical indicators
Live NSE examples below
What is Bollinger Bands and the squeeze?
John Bollinger's bands wrap a 20-day moving average with an upper and lower band set two standard deviations away. Because standard deviation measures volatility, the bands widen in turbulent markets and narrow in quiet ones. The narrowing, called the squeeze, is often more useful than the bands themselves: low volatility tends to be followed by high volatility.
Formula
Middle band = SMA(20)
Upper band = SMA(20) + 2 × standard deviation(20)
Lower band = SMA(20) − 2 × standard deviation(20)
%B = (close − lower) ÷ (upper − lower)
Band width = (upper − lower) ÷ middle
How to read it
- %B above 1 means the close is above the upper band: strong momentum, not necessarily a sell.
- A squeeze (band width at a multi-month low) signals a coming expansion; the breakout direction is the tradable part.
- In ranges, moves to the outer bands tend to revert toward the middle band.
Common mistakes
- Shorting every touch of the upper band. In trends price 'walks the band' for weeks.
Live: NSE stocks matching this today
Bollinger squeeze stocks today 341
| Stock | Change % | Bollinger width % | Band-width percentile (6M) |
|---|---|---|---|
| AJANTPHARMAjanta Pharma Limited | -0.60% | 3.80% | 0.00 |
| AMAGIAmagi Media Labs Limited | -0.88% | 4.92% | 0.00 |
| BALAJITELEBalaji Telefilms Limited | -1.78% | 7.11% | 0.00 |
| CANTABILCantabil Retail India Limited | -0.64% | 4.75% | 0.00 |
| CHOLAHLDNGCholamandalam Financial Holdings Limited | -2.18% | 6.11% | 0.00 |
| COCKERILLJohn Cockerill | -1.34% | 5.60% | 0.00 |
| COROMANDELCoromandel International Limited | -2.94% | 4.62% | 0.00 |
| DECCANCEDeccan Cements Limited | -0.04% | 4.34% | 0.00 |
Use it on Flash Finance
Related concepts
RSI (Relative Strength Index)A 0-100 momentum oscillator: how strong recent up-moves are compared with down-moves.Moving averages (SMA, EMA, 50 and 200 DMA)The average closing price over a window, used to define the trend.Support and resistancePrice zones where buying (support) or selling (resistance) has repeatedly stepped in.
