Trading bands are price boundaries—an upper resistance level and a lower support level—within which a security typically oscillates over a defined period. Technical analysts identify trading bands by studying historical price action, applying tools like Bollinger Bands or Keltner Channels, or mapping key support and resistance zones. When a stock is said to be trading within a band, it suggests a rangebound market without a clear directional trend. A breakout above the upper band may signal the start of a new uptrend, while a breakdown below the lower band could indicate the beginning of a downtrend—both of which are key signals for traders.
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