I often use bollinger bands as well to compliment price action and see where the current price is in terms of its normal range. But in general, I disagree with the shorting just because price tags or is outside its upper bollinger band (same with buying when its at its lower bollinger). In some cases it makes sense, but the first thing John Bollinger said when using the bands is "a tag of the lower band does not, in and of itself, represent a buy and a tag of the upper band does not, in and of itself represent a sell." Combined with other indicators it might, but he also says price can (and will) crawl up the upper band and down the lower band. Interesting chart, but additional indicators might be helpful.
Brotank77
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@thisbemax, I did a day trade on this stock. Unfortunately, I can't seem to post a 5 minute chart on here.
Dudleydogg
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Price is continuing to go UP, Now trading at $3.61 How far will this one go ?
Brotank77
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@Dudleydogg, not sure how far it will go. I closed my short after the candle hit the Bollinger bands. It is still inside the Bollinger bands-so neither oversold nor over bought. I wouldnt go long on it now as the run has been going on too long and the risk now outweighs the reward.
Dudleydogg
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@Brotank77, What do you mean by Short Sell, what defines that?
Dudleydogg
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@Dudleydogg, Also there was some good publicity about their Osteoporosis Treatment for the Knee something about 70% results and only expected 30%
Brotank77
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@Dudleydogg, I was short selling this at the time I posted this. Selling short is when you believe the stock is going to go down so you borrow stocks and sell them on the market. You then have to buy to cover and return the same number of shares back to the owner but you get to keep the difference in price.
I was short selling for a day as the stock was too far from its moving averages for the day and was out of the Bollinger Bands. Since my original post, the moving averages have caught up with the price or the candles. The stock is indeed up on good news. I am more of a technical analysis type of guy so I dont know how far this stock will go. There is probably a resistance level coming up. I would not recommend being a buyer (going long) right now unless your a day trader.
Dudleydogg
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@Brotank77, Thank you for the response, I bought this stock at .51 cents then again at $1.29 Thank you for the Short Explanation. MACD and RSI show as oversold and a dip coming, but this could quickly turn around. This Stock is on a second ATH, but during the last one it Crashed to almost nothing. $3 to $1 back in 2016 and also the Year end reports are coming up soon meaning all stocks could correct themselves. Thank you again for your response. I held for one more day, then might take profit to my initial investment and hold again. I did enter Stop at $3.20 incase im not paying attention and it tanks.
Brotank77
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@Dudleydogg, no problem . Hey if your in it and making money that is awesome. I made my money and moved on to other stocks so I missed out on the run up. You can probably hold until the first red candle day and get out. no one can really say how high it will go. I try to think how other traders are thinking. Like is there a gap that needs to be filled? is there a resistance level where traders will sell? Is it over bought or oversold.