Pull Back Fishing - Head and ShouldersWMT has now broken the bottom bollinger band with the moving average set on 80 verses 20. A break of the bottom bollinger band signals extreme selling pressure and a break of the upper band signals extreme buying pressure. Usually, price returns to the interior of the bands, eventually. WMT also fell from a bearish rising wedge (RW).
When the bands widen, volatility often occurs and when they contract (squeeze), the bands may be signalling a break to the upside or the downside. Bollinger bands can tell you a lot about price without using a ton of indicators. Because Bollinger Bands measure volatility, the bands adjust automatically to changing market conditions. If the upper and lower bands are 2 standard deviations which is the norm, this means that about 95% of price moves have occurred recently are CONTAINED within these bands. The standard moving average which is the line in the middle, is a 20 day moving average.
WMT has met targets 1 for the trip down. Targets 2 are longer term and not always met. As a rule, this pattern does not perform well in a bull market but WMT has fallen a significant amount.
Not a recommendation. Hopefully WMT will find a bottom soon )o:
