{"id":55694,"date":"2021-01-16T13:56:36","date_gmt":"2021-01-16T21:56:36","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=55694"},"modified":"2021-01-16T13:56:38","modified_gmt":"2021-01-16T21:56:38","slug":"general-motors-stock-bollinger-bands-drop-before-brightdrop","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2021\/01\/16\/general-motors-stock-bollinger-bands-drop-before-brightdrop\/","title":{"rendered":"General Motors Stock: The Bollinger Bands Drop Before the BrightDrop"},"content":{"rendered":"\n

Bollinger Bands (BBs) are a powerful trading tool. They define an expected range of volatility in a stock based on recent price action. When that volatility contracts, the Bollinger Bands squeeze into a narrow channel. The resolution of that squeeze – to the upside or downside – can create a powerful continuation of or change in trend. General Motors (GM) experienced an upside resolution to the squeeze of its Bollinger Bands ahead of big news about its new electric ecosystem BrightDrop. Presumably, some traders got the drop on<\/a> GM’s announcement.<\/p>\n\n\n\n

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The General Motors Company (GM) launched sharply higher out of a Bollinger Band squeeze. Source: FreeStockCharts<\/em><\/strong><\/figcaption><\/figure><\/div>\n\n\n\n

A slow downdrift in price in December reduced volatility for GM stock. The above chart shows where the Bollinger Bands narrowed. A 4.5% gain accompanied the upward resolution from the BB squeeze and triggered a buy signal: the Bollinger Bands drop before the BrightDrop news. The following day, GM soared another 6.2%. As a result, the combination created a very bullish confirmation of the on-going uptrend from the breakout above last summer’s resistance at the 200-day moving average (DMA)<\/a>. <\/p>\n\n\n\n