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Ratio of Stocks above and below Bollinger Bands

by Brian Brown, 4801 days ago
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This composite calculates the ratio of stocks trading above their upper Bollinger band to stocks trading below their lower Bollinger band.

The number of stocks trading above/below their upper/lower Bollinger band is computed by comparing the close price to the 20-bar "BbandsUpper"/"BbandsLower" function.
A value of 60 tells us that among stocks trading outside their Bollinger bands, 60% are trading above the upper band.

Interpretation:
- Above 50: There are more stocks above their upper band than stocks below their lower band. This is a bullish signal. Contrarian traders may see this as a bearish signal if the value stays high for long period.
- Below 50: There are fewer stocks above their upper band than stocks below their lower band. This is a bearish signal. Contrarian traders may see this as a bullish signal if the value stays low for an extended period.
- Near 50: Market neutral. The number of stocks above/below upper/lower Bollinger band is the same.

Related Composites:
Number of Stocks Above Upper Bollinger Bands: It counts, for each bar, the number of securities trading above upper Bollinger band.
Keltner Channel Market Composite: It calculates a volatility ratio index similar to one created by this market indicator. However, it is use the Keltner Channel indicator instead of the Bollinger Bands. The Keltner Channel is a technical analysis indicator created by Chester W. Keltner. It can be downloaded here: Keltner Channel.


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Type: Composite Index

Object ID: 1043


Country:
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Market: Stock Market

Style:
Technical Analysis

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