LD: First of all, the Bollinger Bands are a lagging indicator which follows the price action up and down, as opposed to the Donchian Channels or visual measures of support and resistance levels. The upper or lower band can follow the mkt up or down (as it did in the Naz bear mkt) for a long time.
I have never liked the Bollingers very much for that purpose, and have used them primarily for contriction action that portends a big move out of it.
Let me share a little of a Bollinger lesson: GNSS had hourly bank that was extremely wide and parabolic and then contricted near 24 a few days ago. Was one of many indications to me that it was an excellent risk-reward ratio. I have to admit, I used TA as an Art as well as a Science to make that GNSS purchase, which was a few thousand shares.
I had seen certain patterns in the past 20+ years, and used my interpretation of the 2 downgrades along with other important data to base my purchase on. Few would see what I saw and and from a classical technical view, it was not a buy.
Now it should retest 29.95 and though it could back off again, I think it has a good chance of breaking out to 33 next week, and then retracing to 30-ish support before filling the gap later in March at 40.
BTW, the daily stochastics on many stocks are experiencing or will be experiencing a stochastic pop, so don't let the high readings fool you. The k can fool around between 75 and 100% and the d can stay at 70% plus or minus 10% for weeks in an intermediate term rally, as you well know. But we are going to back and fill from day to day as we are not yet in a heavy volume rally that moves up almost incessantly or inexorably. That will come later.
Above are just my opinions and should not be construed as recommendations to buy or sell GNSS. Always do your own due diligence/research before investing, or trading. Disclosure: I own shares of GNSS currently. |
