CallsAndPuts.com
The Most Comprehensive Options Data Site on the Web!
 
Home  |  Member Login  |  Free Trial  |  Sign Up Now  |  Advertise With Us  |  Stock Index  |  Contact Us
Option Data
Bollinger Bands and RSI:
What are they and what do they tell us?

How To Use Them

Click on the stock symbol under the "BB&RSI" heading on the far right column on any of the data pages on the CallsAndPuts.com site.

Quick Summary Table

READING1 MEANING2 ACTION(S)3
Stock price touches the upper Bollinger Band and RSI is greater than 70 A relative high in the stock price may have been reached and a downturn in stock price may occur in the near term.
  • Sell stock outright
  • Buy puts
  • Sell deep ITM covered calls
Stock price touches the lower Bollinger Band and RSI is less than 30 A relative low in the stock price may have been reached and an upturn in stock price may occur in the near term.
  • Buy stock
  • Buy calls
  • Sell OTM covered calls
Stock price is at the upper Bollinger Band but RSI is less than 70 Inconclusive.  Generally the current stock movement trend will continue.
  • Sell ATM covered calls
  • Establish some type of option spread
Stock price is at the lower Bollinger Band but RSI is greater than 30 Inconclusive.  Generally the current stock movement trend will continue.
  • Sell ATM covered calls
  • Establish some type of option spread

1. READINGs are relative to the settings you have selected for the Bollinger Bands and RSI on the chart that you are viewing.

2. MEANINGs are presented to be a general interpretation only and actual accurate analysis can differ materially based on many factors.

3. ACTIONs are not to be construed as a suggestion or recommendation to trade any security in any way, and are not meant as a comprehensive list of possible plays or methods.

Comprehensive Explanations

Bollinger Bands:

http://www.equis.com/free/taaz/bollinger.html

http://www.e-analytics.com/bolinger.htm

http://www.BollingerBands.com

RSI (Relative Strength Index):

http://www.equis.com/free/taaz/rsi.html

http://www.e-analytics.com/rsi.htm
1. Covered Calls
2. Hedge Wrapper
3. Sell Naked Puts
4. Sell Naked Calls
5. Bull Put Spread
6. Bear Call Spread
7. Bull Call Spread
8. Bear Put Spread
9. Buy Calls
10. Buy Puts

CoveredCalls.com

Option Descriptions
1. Covered Calls
2. Hedge Wrapper
3. Sell Naked Puts
4. Sell Naked Calls
5. Bull Put Spread
6. Bear Call Spread
7. Bull Call Spread
8. Bear Put Spread
9. Buy Calls
10. Buy Puts
Option Examples
1. Covered Calls
2. Hedge Wrapper
3. Sell Naked Puts
4. Sell Naked Calls
5. Bull Put Spread
6. Bear Call Spread
7. Bull Call Spread
8. Bear Put Spread
9. Buy Calls
10. Buy Puts

Site Resources:
· Bollinger Bands & RSI
 · How to Use Our Site
 · Characteristics and Risks of Standardized Options
 · Disclaimer
          
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Copyright © 1999-2006 CallsAndPuts.com, LLC.  All Rights Reserved.
CallsAndPuts.com is an information service provided by CallsAndPuts.com, LLC.
Options involve risk and are not suitable for all investors.
Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options from your broker.
Privacy Statement and Important Disclaimer: 
Data and information is provided for informational purposes only, and is not intended for trading purposes. Neither CallsAndPuts.com, LLC nor any of its data or content providers shall be liable for any errors, omissions, or delays in the content, or for any actions taken in reliance thereon. Data is deemed accurate but is not warranted or guaranteed. CallsAndPuts.com, LLC is not a registered broker-dealer and does not endorse or recommend the services of any brokerage company. The brokerage company you select is solely responsible for its services to you. By accessing, viewing, or using this site in any way, you agree to be bound by the above conditions and disclaimers found on this site.
Questions or Comments? Email:
Comments@CallsAndPuts.com