InvestorQ : Can you explain simple moving averages, EMA and Bollinger Bands with a live example of prices?
shrinidhi Rajan made post

Can you explain simple moving averages, EMA and Bollinger Bands with a live example of prices?

Answer
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Riya Dwivedi answered.
1 year ago


The table below is comprehensive and contains all the data that you may want to see. We have followed up the interpretation of the data after the table at the end.

Closing Price

Volumes

Date

SMA-20

SMA

BB-Upper

BB-Lower

EMA

164.92

1,023

03-Sep

164.92

164.92

748

04-Sep

Variable Name

Value

164.92

165.20

1,066

05-Sep

PERIOD

14.00

164.96

165.07

3,854

06-Sep

Std Deviation

2.00

164.97

165.20

10,142

07-Sep

165.00

165.26

1,41,914

08-Sep

165.04

165.07

1,74,385

09-Sep

165.04

164.41

1,63,463

10-Sep

164.96

163.98

1,22,857

11-Sep

164.83

163.81

1,12,605

12-Sep

164.69

164.09

1,29,824

13-Sep

164.61

164.37

2,32,717

14-Sep

164.58

164.44

2,20,827

15-Sep

152.91

153.93

151.89

164.56

164.40

1,387

16-Sep

164.65

165.64

163.66

164.54

164.34

327

17-Sep

164.61

165.60

163.62

164.51

164.35

109

18-Sep

164.57

165.55

163.59

164.49

164.35

187

19-Sep

164.51

165.43

163.59

164.47

164.29

383

20-Sep

164.45

165.32

163.59

164.45

164.44

325

21-Sep

164.40

165.15

163.65

164.45

164.40

1,425

22-Sep

164.57

164.34

164.90

163.77

164.44

164.28

9,045

23-Sep

164.53

164.28

164.66

163.90

164.42

164.85

1,25,968

24-Sep

164.53

164.31

164.80

163.83

164.48

165.33

1,37,483

25-Sep

164.54

164.41

165.10

163.72

164.59

165.90

1,23,085

26-Sep

164.58

164.56

165.54

163.58

164.76

165.83

70,326

27-Sep

164.61

164.68

165.83

163.54

164.91

165.77

63,383

28-Sep

164.64

164.78

166.05

163.52

165.02

165.88

81,577

29-Sep

164.68

164.89

166.26

163.51

165.14

165.76

2,20,271

30-Sep

164.74

164.98

166.40

163.56

165.22

166.02

62,195

01-Oct

164.85

165.10

166.57

163.64

165.33

166.05

1,208

02-Oct

164.96

165.23

166.71

163.74

165.42

166.01

1,026

03-Oct

165.05

165.34

166.79

163.90

165.50

166.04

477

04-Oct

165.14

165.47

166.82

164.12

165.57

165.88

281

05-Oct

165.21

165.57

166.80

164.34

165.61

165.77

607

06-Oct

165.28

165.67

166.70

164.64

165.63

165.94

416

07-Oct

165.36

165.79

166.44

165.14

165.68

165.84

2,135

08-Oct

165.43

165.86

166.22

165.49

165.70

165.98

6,097

09-Oct

165.51

165.91

166.11

165.70

165.74

166.31

1,13,836

10-Oct

165.61

165.93

166.23

165.64

165.81

165.89

1,27,052

11-Oct

165.69

165.94

166.23

165.64

165.82

166.15

62,970

12-Oct

165.77

165.97

166.26

165.67

165.87

166.03

41,628

13-Oct

165.86

165.98

166.27

165.68

165.89

165.98

46,387

14-Oct

165.92

165.99

166.26

165.72

165.90

166.17

43,960

15-Oct

165.96

166.00

166.29

165.72

165.94

165.92

1,04,685

16-Oct

165.96

165.99

166.28

165.71

165.93

165.85

28,367

17-Oct

165.96

165.98

166.28

165.69

165.92

165.84

2,937

18-Oct

165.97

165.97

166.27

165.67

165.91

165.95

1,256

19-Oct

165.97

165.97

166.27

165.67

165.92

165.98

159

20-Oct

165.98

165.99

166.26

165.71

165.93

165.96

66

21-Oct

165.98

165.99

166.26

165.72

165.93

165.86

59

22-Oct

165.97

165.99

166.26

165.72

165.92

165.92

128

23-Oct

165.96

165.99

166.26

165.71

165.92

166.22

1,400

24-Oct

165.97

165.98

166.22

165.74

165.96

166.83

49,527

25-Oct

166.02

166.05

166.56

165.54

166.08

165.18

3,17,272

26-Oct

165.99

165.98

166.66

165.29

165.96

166.27

3,40,158

27-Oct

166.01

166.00

166.70

165.29

166.00

166.53

1,47,176

28-Oct

166.04

166.03

166.79

165.28

166.07

166.39

79,122

29-Oct

166.06

166.05

166.83

165.27

166.11

166.80

81,435

30-Oct

166.09

166.11

166.98

165.24

166.20

166.66

87,030

31-Oct

166.12

166.17

167.07

165.27

166.26

As can be seen from the above table, the SMA is a simple moving average of the time period you want and we have considered the 20-day SMA and also the 14-day SMA. The EMA line is clearly much smoother than the price line or even the SMA line, which is the essential purpose anyways. Lastly, the Bollinger bands show the range in which the trade bands are created at a gap of 2 times of standard deviation. These are the ranges that you find out whether the stock is oversold or overbought and take trading decisions accordingly.