Breakouts above or below Bollinger Bands occur from time to time, mostly as a result of a major event. While the breakouts are always indicative of strength in a given direction, they should never be relied upon as trading signals. A breakout could trigger oversold or overbought situations whereby price could bounce back or collapse afterward. Analysts pay particular attention to when prices are trending near the upper or lower bands.
When John Bollinger created Bollinger Bands in the early 19 […]