Bollinger Bands

Bollinger Bands are three lines plotted on a stock chart that show you when a price might be unusually high or low. The middle line is a 20-day moving average (the stock's average price over the last 20 days), and the two outer bands sit above and below it, measuring how much the price typically bounces around. You'll see them in technical analysis—the practice of predicting price moves using charts and patterns. They matter because traders use them to spot potential buying or selling opportunities: when a stock price touches the upper band, it might be overpriced; when it hits the lower band, it might be underpriced. For example, if TechCorp stock suddenly shoots up to its upper Bollinger Band, some traders see that as a signal to sell.