Well, the last 4 expansions increased the BB width by approximately $3, $1, $2, and $2 respectively:
stockcharts.com[w,a]daclyyay[dc][pd20,2!b200][vc60][iLyb20,2.0!Lk14]&pref=G
Looking at longer term charts, this amount of expansion seems reasonably representative.
The average of the numbers above is $2. If the BBs expand here by the same amount, then when fully expanded the width will be about $3, since the width at the tightest was about $1.
The problem here is that as the lower rail is pushed down, the expansion will be partially offset because the upper rail will not expand outward, it will stay level and then soon start bending down.
So.... let's assume it stays level (that can't really last long, of course). Currently that upper rail is at $38.48. A $3 BB width would then put the lower rail at $35.48, which would agree with your conclusion.
But there's another possible scenario. That is that the pullback could be more rapid than I anticipate, push the lower rail down to say $36.50, then reverse and rally up to the upper rail and push that open. That rail would have to get pushed up toe $39.50 to make the BB width $3.
Right now, this scenario seems unlikely to me. When we see how volume patterns develop over the next week, we'll know a lot more.
But you make a very good point.... expansion of the BBs would indeed predict that QQQQ will move lower than $36.50.
T |
