The 3 lines on the Qantas chart below are Bollinger Bands.  The upper and lower blue ones are measures of standard deviation or “variance” from a mean value.  The purple one in the middle is a 20 day moving average i.e. a mean value.  Bollinger Bands are a tool designed to tell you something about both trend (price above or below the moving average) and the strength of trend (price above or below the standard deviation lines)

At the moment, the Bollinger Bands are telling us that the momentum of the Qantas uptrend is stalling. It was initially very strong with every day’s candle above the 2% standard deviation line. Theoretically this only happens 5% of the time. Now though, Qantas has made a trend peak well under the upper band. Even though Thursday’s price was the highest in the recent trend, its variance from the mean was lower indicating declining trend strength.

This situation often indicates that a trend change or pull back is on the cards. If we do get a pullback here the zone around the 20 day moving average in the low $1.40’s might provide support for Qantas shares. This suggests that potential buyers might be rewarded for a bit of patience in holding off at the moment.

Qantas shares - daily

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