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For today's chart we've added a price overlay known as Bollinger bands - used to determine overbought and oversold conditions for a security. The indicator is created by plotting a 21-day SMA onto the chart and then adding two bands around the average so that they are positioned two standard deviations away. A move toward the upper band is used by traders as an indication that the security is becoming overbought, and a move toward the lower band suggests it is becoming oversold. As markets become more volatile the bands widen, and when volatility decreases the bands tighten. As you can see from the chart below, the bands have been moving away from each other and the volume has drastically increased, which suggests that the amount of volatility is higher then it has been in the past.

A move from above the upper band to below is often used by traders as a signal of a likely pullback toward the center average. Yesterday's cross below the band seems to be different than the one that happened in late December because today's move shows an evening star candlestick pattern. The combination of these two bearish signals can be used as confirmation of a move lower, and we'd expect to see ENG head toward the support of the moving average before it is able to head higher.

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