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Breakouts scan

Bollinger Band Breakout Screener

This scan finds stocks that closed above the upper Bollinger Band (20 days, 2 standard deviations) on at least 1.5 times their average volume.

Run this scan in the live demoFree, no sign-up. The demo uses made-up sample data.

The exact rule

Type this in Chalni: close above upper bollinger band and volume above 1.5x average

  1. Close > BB upper(20)
  2. Volume > 1.5× Avg vol(20)

Find US stocks where the closing price is above the upper Bollinger band (20, 2); and today's volume is above 1.5 times the 20-day average volume.

Formula view
close > bb_upper(20, 2)
AND volume > 1.5 * avg_volume(20)
Example chart: Bollinger band breakoutDaily candles of a made-up sample stock with Bollinger bands (20, 2); Lower panel: volume bars, and 1.5 × the 20-day average volume. The shaded day is the day the scan fired.
  • Bollinger bands (20, 2)
  • Lower panel: volume bars, and 1.5 × the 20-day average volume
  • Shaded day: the scan fired
Example from Chalni's made-up sample market, not a real stock. It shows the most recent time this scan fired in the sample US market, picked whether or not the trade worked.

What it means

Bollinger Bands, created by John Bollinger in the 1980s, draw a band two standard deviations above and below a 20-day average. Price stays inside the bands most of the time, so a close above the upper band is an unusual, strong move.

Some traders read a close above the band as "too far, too fast" and expect a pullback. Others read it as the start of a strong trend. The volume rule leans toward the second view: it asks for real buying behind the move.

How traders use it

  • Breakouts right after a squeeze (very narrow bands) often have more room to run.
  • Many traders hold while price "walks the band" and exit on a close back below the middle band, the 20-day average.
  • Add a trend rule, such as close above the 50-day average.

Watch out for

  • A touch of the upper band is not a buy signal by itself. John Bollinger himself says tags of the bands are not signals.
  • After a long run-up, a band breakout can be the last burst before a pullback.

Test it before you trust it

Every scan in Chalni sits an exam. First it runs on older data, the practice: each time it picks a stock, the stock is held for 10 trading days and 0.2% is paid in costs. Then it runs on newer data it has never seen, the exam. A scan that only works in practice has just memorised the past.

See the practice and exam results for this scan in the demo (on sample data; real data comes at launch).

Questions

Is closing above the upper Bollinger Band bullish or bearish?

It can be either. It shows strong buying, but the price is stretched. After a squeeze and on high volume it is often bullish; after a long rally it can mark a short-term top.

What are the standard Bollinger Band settings?

20 periods and 2 standard deviations. This scan uses those settings.

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