Tells Me: Trading is overstretched and prices may turn around; watch for signs of reversal. But be aware that momentum may be strong enough to first continue in the direction that the Bollinger Band was pierced. Bollinger Bands wrap the trading action within an upper and lower band which, when pierced, provide indication of overbought and oversold levels when the price moves beyond the typical range above or below respectively. The most common setting is to use a 20 bar moving average and draw the bands at 2 standard deviations above and below. Changes in the width of the bands signal changes in the price volatility; the bands expand when the price is experiencing greater volatility, and contract during periods of lesser volatility.