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Volatility scan

Bollinger Squeeze Screener

This scan finds stocks whose Bollinger Band width (20, 2) is below 6% of the price, while the price is above the 50-day moving average.

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

The exact rule

Type this in Chalni: bollinger width below 6 and close above 50 day sma

  1. BB width(20) < 6
  2. Close > SMA(50)

Find US stocks where the Bollinger band width % (20) is below 6; and the closing price is above the 50-day simple moving average.

Formula view
bb_width_pct(20) < 6
AND close > sma(close, 50)
Example chart: Bollinger squeezeDaily candles of a made-up sample stock with 50-day SMA; Bollinger bands (20, 2); Lower panel: Bollinger band width % (20), dotted line at 6. The shaded day is the day the scan fired.
  • 50-day SMA
  • Bollinger bands (20, 2)
  • Lower panel: Bollinger band width % (20), dotted line at 6
  • 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

When a stock gets calm, its Bollinger Bands move close together. John Bollinger called this the squeeze. Low volatility does not last forever, so a squeeze often comes before a bigger move.

Band width is the distance between the upper and lower band, divided by the middle band. Below 6% is tight for most stocks. The 50-day rule points the scan toward squeezes in uptrends, where a break upward is more likely.

How traders use it

  • Wait for the break: a close above the upper band, often on high volume, is a common trigger.
  • Put the stop on the other side of the tight range.
  • Compare with the stock's own history: tight for one stock can be wide for another.

Watch out for

  • The squeeze says a move may come, not which way.
  • Some stocks stay calm for a long time. It takes patience.

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

What is a Bollinger Band squeeze?

A period when the bands are unusually narrow because volatility is low. It often comes before a big price move.

What is a good Bollinger width for a squeeze?

There is no single number for every stock. This scan uses 6%; some traders use the lowest width of the last 6 months instead.

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