StockSignal
%B shows where price sits between the lower and upper Bollinger bands. 0 means at the lower band, 1 at the upper band.
How it relates
(Closing PriceClosing price is the last traded price of the period. It's the most common reference price for charts and indicators.−Bollinger Lower (20)The lower Bollinger band is the mid line minus a volatility buffer. Price touching it can point to strong downside or possible exhaustion.)÷(Bollinger Upper (20)The upper Bollinger band is the mid line plus a volatility buffer. Price touching it can signal strong upside or possible overextension.−Bollinger Lower (20)The lower Bollinger band is the mid line minus a volatility buffer. Price touching it can point to strong downside or possible exhaustion.)=%B (Bollinger 20)
%B shows where price sits between the lower and upper Bollinger bands. 0 means at the lower band, 1 at the upper band.
The calculation:
%B = (Price - Lower Band) / (Upper Band - Lower Band)
Interpreting %B values:
- %B = 1.0: Price at the upper band
- %B = 0.5: Price at the middle band
- %B = 0.0: Price at the lower band
- %B > 1.0: Price above the upper band
- %B < 0.0: Price below the lower band
Trading applications:
- Overbought/oversold: High %B suggests overbought; low %B suggests oversold
- Trend strength: Consistent high %B indicates strong uptrend
- Mean reversion: Extreme %B values often precede reversals
- Divergences: Price making new highs with lower %B can warn of weakness
Advantages of %B:
- Normalised scale: Comparable across different stocks and time periods
- Quantifies position: Precise measure rather than visual interpretation
- Scanning: Easy to screen for stocks at extreme %B levels
%B complements visual Bollinger Band analysis by providing a numerical value that can be used in systematic trading strategies and screening.