Bollinger Bands are three lines drawn around a price chart that show how far a stock is trading from its recent average, adjusted for how jumpy it has been. The middle line is a moving average; the upper and lower bands widen when the stock gets more volatile and narrow when it goes quiet.
The middle band is usually a 20-day moving average. The upper and lower bands sit two standard deviations away — a statistical measure of how spread out recent prices have been. Example (illustrative): if the 20-day average is $100 and the recent standard deviation is $5, the upper band is 100 + (2 × 5) = $110 and the lower band 100 − (2 × 5) = $90. The stock spends most of its time inside the two bands.
The middle band is a 20-day moving average; the outer bands sit two standard deviations above and below it. Standard deviation measures how spread out recent prices have been, so the bands widen when the stock is volatile and narrow when it's calm.
No. Touching a band only means price is far from its recent average relative to its volatility. A strong stock can ride the upper band higher for a long time.
It's when the bands narrow sharply because volatility has dropped. Traders read it as a sign a larger move may be building, but it does not tell you the direction.
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Educational research only — not investment advice.