Projection Bands are drawn by finding the minimum and maximum prices over a specified number of days and projecting these forward, parallel to a linear regression line. The resulting plot consists of two bands representing the minimum and maximum price boundaries.
As opposed to the Bollinger Bands® study, prices will always be contained by the two bands. The upper band represents a bullish view on the issue and the lower band a bearish one. When the price of an issue nears the upper limit, expect a price correction. If the price is nearing the lower limit, expect prices to move upwards.
||The number of bars used to calculate the Projection Bands.|
||The upper Projection Band.|
||The lower Projection Band.|
Bollinger Bands® is a registered trademark of John Bollinger.
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.