What Bollinger Bands Are Saying About Stocks Right Now

What Bollinger Bands Are Saying About Stocks Right Now

Wed, September 2, 2026 at 3:00 PM GMT+3 3 min read

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The indicator that caught my eye this week is good ol' Bollinger Bands. Bollinger Bands are one of the most popular technical indicators and are available on any charting software that I've seen. Bollinger Bands typically use a 20-day moving average as the centerline, and upper and lower bands are drawn two standard deviations above and below the moving average. The conventional way to interpret the indicator is that when the stock closes below the lower Bollinger Band, it's oversold. When it closes above the top band, it's considered overbought.

What caught my eye was that at the close on Monday, the S&P 500 Index (SPX) was within 1.5% of its all-time high, but many stocks had Bollinger Band signals, and a large majority of them were to the downside. I wondered if this was common and if it could tell us anything about what to expect from the market going forward.

Also, one of the largest and most popular stocks, Apple (AAPL), was one of just a handful of stocks that recently signaled above its top Bollinger Band. In the article below, I dig into AAPL's historical signals to see how the stock tends to perform based on the indicator.

SPX Stocks Oversold & Index Near Highs

On Monday, the SPX was still within 1.5% of its all-time high (it fell below that today). Over the previous 10 days, there were over 100 Bollinger Band signals, and over two-thirds of those signals were stocks closing below their lower Bollinger Bands, as opposed to closing above the top bands.

Going back to 2016 and using the criteria above (SPX within 1.5% of the high, over 100 Bollinger Band signals, and over two-thirds of them oversold), there have been 20 previous signals. To avoid bunches of signals, I only considered the first signal over a 20-day period. The table below summarizes the SPX returns after these signals. The second table below shows typical index returns for comparison.

Looking at the table below, there's slight outperformance two weeks after a signal but underperformance one and three months after. The two-week returns show a higher-than-normal percentage of positive returns, with less volatility based on the average positive and negative returns. The higher percentage of positive returns is the reason for the outperformance.

The underperformance at one and three months is not due to fewer positive returns (the percentage of positive returns is about the same as usual). The underperformance was due to less upside at the one-month time frame, and then at three months, it was due to less upside and more downside.

Looking at Apple Stock Signals

I mentioned that AAPL was one of just a few stocks to close above its top band over the past few days. The table below shows how the stock performed after these Bollinger Band signals.

The standard reading of Bollinger Bands, in which the top band signals overbought conditions and the bottom band signals oversold conditions, would have steered you wrong with AAPL. For the data below, I went back to 2016 and only counted signals if they were the first close above or below the band in at least a month. There were 42 instances in which AAPL closed above the top band. The stock averaged a return of 4.12% over the next month, with 74% of the returns positive and 64% of those returns beating the SPX. When AAPL closed below the bottom band, it averaged a return of 1.19% over the next month, with 60% of returns positive and 54% beating the SPX. Those figures all underperform the typical AAPL returns.

In other words, don't let the Bollinger Band overbought signal for AAPL scare you out of a short-term trade. In fact, it could be a driver.

I mentioned that there have been a lot of stocks closing below their lower Bollinger Bands. The table below lists the stocks that signaled recently and have a history of beating the SPX after these signals. Based on this indicator, these stocks are set up for a bullish short-term trade.