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This script will download past 60 days historical data from Yahoo Finance, then calculate the Bollinger Bands value.

It will check if the stock price moves above or below the upper and the lower Bollinger Bands. Cells mark as ‘Red’ indicate Bearish, which means stock price moves above the upper band. Cells mark as ‘Green’ indicate Bullish, which means stock price moves below the lower band.

Bollinger band is one of the most popular technical analysis techniques, it was created by John Bollinger in the early of 1980s. Its most commonly used to determine the highness and lowness of the underlying security price.

Bollinger bands consists of 3 lines:

Middle Band - N period simple moving average of the security price
Upper Band - Number of Standard Deviations (D) above the simple moving average
Lower Band - Number of Standard Deviations (D) below the simple moving average

The most typical value for N and D are 20 and 2 respectively.

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Since Bollinger Bands are plotted at standard deviation levels above and below a moving average, this produces an effect of the bands are widen during periods of higher of volatility and narrow during less volatile periods.

The following are the steps to calculate Bollinger Bands

• Calculate the 20 days Simple Moving Average
• Upper band = Simple Moving Average + 2 Standard Deviation
• Lower band = Simple Moving Average - 2 Standard Deviation

Trading signals

Trading signals are given when stock price reach or went out of upper and lower bollinger bands. From the chart above, we can learn that the chances of reversal are high whenever stock price went out of the bollinger bands.

We strongly recommend you to combine Bollinger Bands with other indicators as a confirmation of the reversal.